Primark placing big orders despite sales hit
By Rob Freeman | 2nd July 2020
Primark is placing more than £1billion in orders and planning to open new shops across Europe, despite a huge drop in sales.
A trading update from the fashion chain's owners Associated British Foods revealed a 75 per cent drop in sales during its third quarter and a forecasted fall in annual profits of around two-thirds.
But promising figures since outlets reopened, with queues outside many shops as coronavirus restrictions were lifted, has persuaded bosses to press ahead with the orders for the autumn and winter seasons.
With no online trading, Primark had no sales from the introduction of restrictions in March until European stores began to reopen on May with all 153 in England following suit on June 15.
In the seven weeks up to June 20, sales were just 12 per cent down on the previous year and hit £133million the following week - ahead of 12 months earlier in England and Ireland.
The company said: "Nearly all Primark stores are now trading again and we estimate that, absent a significant number of further store closures, adjusted operating profit for Primark, excluding exceptional charges, will be in the range £300-350million for the full year compared to £913million reported for the last financial year."
It confirmed £800million of orders had already been placed for the autumn-winter season - a figure which is expected to rise above £1billion.
All but eight of Primark's 375 shops are trading again with children's wear, summer wear, leisure clothes and nightwear topping the sales charts.
The five new shops are scheduled to open in the US, France and Poland.
The news is at odds with the trend on the high street with John Lewis, Harrods, TM Lewin and Topshop's owner Arcadia among those announcing job cuts in the last few days.
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