The owner of Primark has revealed that the latest wave of Covid-19 lockdowns cost the fashion chain £430m in lost sales but that it has experienced a “phenomenal” jump in sales this week since stores were allowed to reopen.
The finance director of Associated British Foods (ABF), John Bason, said that trading across reopened Primark stores in England, Ireland, France and Belgium had been better than predicted.
“Our trading before the lockdown and now our trading these first few days after lockdown [is] way higher than we had previously expected,” Bason said.
“It is phenomenal, in some cases we haven’t seen anything like it,” he said.
Primark reopened all 153 of its English stores on Wednesday after a month-long lockdown, with extended trading hours in an attempt to recoup some of its lost sales. Eleven stores stayed open overnight, resulting in a 40-hour trading marathon, with hundreds of shoppers queueing to get into the shops in the small hours of Thursday morning.
The company said 34 of its stores – including all those in Northern Ireland and Austria – are still temporarily closed, accounting for 7% of its total store footprint. That compares with the closure of 62% of its store space in November.
The jump in pre-Christmas sales is expected to help Primark offset the £430m it lost over England’s second lockdown. The estimated loss, which was released in a trading update on Friday, is larger than the £375m hit it predicted at the start of November.
ABF still expects Primark to beat sales and profits recorded for the past financial year, when sales fell 24% to £5.9bn and profits slumped 62% to £362m in the 12 months to September.
The company said that some stores were still facing restrictions on trading hours and the number of customers allowed in stores, and that there was still “uncertainty” about further lockdown closures in the short-term.
In a week when two of the UK’s biggest retailers – Debenhams and Sir Philip Green’s Arcadia empire – have collapsed into administration and amid growing concerns about the future of the high street as a result of the switch to online shopping, the Primark owner struck an optimistic tone, saying it remained committed to expanding its shops. Primark does not sell online.
The news sent ABF shares up 2% on Friday morning.
The company also said it was fully prepared for the end of the Brexit transition period at the end of December.
As companies await news of a potential UK-EU trade deal, ABF said: “Our businesses have completed all practical preparations for the end of the transition period this month and contingency plans are in place should our businesses experience some disruption at that time.”