Primark owner Associated British Foods estimates it will lose £1.1bn in sales over the first half of its financial year as coronavirus-induced restrictions have forced the retailer to close its stores for weeks at a time.
The UK group expects Primark, a discount fashion chain that does not sell online, to generate about £2.2bn of sales in the six months to the end of February, compared with £3.7bn in the same period a year earlier.
It expects to barely break even on an adjusted operating profit basis in the period, compared with £441m for the same period in the previous financial year.
Most of the group’s stores have been closed due to lockdown restrictions from November.
“Our retail performance in the first half was materially impacted by the restrictions on movement of people and of trading activity put in place by the UK and European governments,” the group said in a trading update for the 24 weeks to February 27 on Thursday.
ABF expects to reopen 233 of its stores, which will boost its retail space trading to 83 per cent, by April 26. It will reopen 153 stores in England on April 12, as permitted under the UK government’s plan unveiled this week to bring England out of lockdown.
The retailer’s level of discounting was substantially lower than the same period last year, it said. The company expects to warehouse about £260m of autumn and winter stock for later this year.
The group said it expected first-half revenue and profit in its grocery, sugar, agriculture and ingredients businesses to be “ahead of both expectations and the first half of last year”.
The group last month predicted losses of £1.05bn, up from an earlier estimate of £650m, in sales should its shops remain closed until February.
Over the previous quarter, revenue at Primark fell 30 per cent after Covid-19 restrictions across Europe shut three-quarters of its stores.