Primark bounces back from lockdown drop, opens new stores in US, Spain, Italy
Primark said Friday that the second wave of autumn lockdowns has cost it £430 million in sales. But at least stores in its major markets of the Republic of Ireland, England, France and Belgium reopened in the last week after a shorter period of enforced lockdowns.
And the good news is that sales in the days since reopening in each of these markets “have once again been very strong, reflecting the excitement and appeal of the Primark offering”. The company has extended its Christmas season opening hours in Ireland and England “to cater for the anticipated higher customer demand and to help ensure a safer environment by spreading shopping hours over a longer period”.
But it still has plenty of stores that are under mandatory lockdowns with 34 locations shut internationally, including all stores in Northern Ireland and Austria. These only represent 7% of its total retail selling space compared to 62% when the highest number of stores were shut in November.
While the lockdowns haven’t been as long as those that happened during the spring, they’ve come at the worst possible time when retailers traditionally see a greater percentage of their annual turnover. That’s why the estimated lost sales figure is as high as £430 million, although the company has been able to claw back some costs. The operating costs of the stores that were closed were reduced by some 25% during the time when their doors were firmly shut.
The company also said that all of the orders it had placed with its suppliers have been honoured.
And Primark has continued to open new locations. Since the start of this financial year in mid-September, it has opened new stores in the US at American Dream, New Jersey and Sawgrass Mills, Florida. “The success of these store openings in the US and our like-for-like performance in our reopened stores is very encouraging, reinforcing our confidence in the acceleration of our US store opening programme”, it said.
And it added that it “had a very strong customer response to the opening of our first store in Rome, Italy last week”. The company has also opened its fifth store in Barcelona and on Friday actually opened its 50th store in Spain.
So what does all this mean for overall sales and profits? Well, given that the previous financial year was dented by the spring lockdowns, it expects Primark sales and profit will be higher this financial year and it will continue to expand retail selling space.
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