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Primark suffered a Covid issue in the fourth quarter, but recovery is happening

Transaction updates from Primark The owner, Associated British Foods, has shown that fashion retailers are on the road to recovery. Third-quarter sales exceeded the comparable period two years ago, but new restrictions reversed some of that profit in the fourth quarter. ..

Photo: Sandra Holiday

total When the numbers are finally aggregated and similar performance in the third quarter increased by 3% year-on-year, sales in the second half of the 53rd week through September 18 should be £ 3.4 billion.

The company cited “a very strong deal in the UK and the European region where stores have reopened.”

Because Primark doesn’t trade online, it hit sales more than many of its peers during the heyday of the pandemic. But when the store reopened, it was also one of the most popular destinations for physical shoppers.

But what about the recession in the fourth quarter? As Delta variants took hold, sales were impacted by lower footfalls as a result of changes in public health measures in key markets. The fourth quarter was quite different in the various “big influence” markets of the UK and Spain.

However, as time goes on, sales should improve and similar sales in the fourth quarter should be “just” 17% less than in the same period two years ago.

Looking at some of these countries in detail, in the UK, so-called pingedmics have generated many contract tracking alerts, forcing people to quarantine themselves. Primark sales fell in late June and early July. However, August regained it, driving a 24% decline in the first four weeks of the quarter to an 8% decline in the last four weeks.

In continental Europe, performances in Spain and Portugal were due to the low number of vacationers. In addition, Portugal has imposed strict limits on the number of store customers for most of the time. Similar sales in both markets were down more than 30% compared to two years ago.

In France Pass the sanitaryShows personal immunity to Covid-19 and was introduced in early August, leading to a reduction in footfall.

However, similar US sales for the quarter, excluding the currently shrinking Downtown Crossing Store in Boston, were 3% higher than they were two years ago.

According to the company, the trend of “comfort living” continues, such as “Sales of leisure wear such as leggings and cycle shorts are strong, and demand for seamless matching separates for women continues.” And there was a “good reaction” to the launch of new licensed products such as women’s wear. Disney Paisley range. Sales of the AW21 range have “started smoothly” and the range for the new semester is strong.

Primark said that the operating margin in the second half of the year before the employment retention scheme was repaid benefited from a “significant reduction” in store labor costs and a reduction in store operating costs, exceeding 10%. Said expected. Full-year forecast-adjusted operating profit is higher than last year’s.

For the next fiscal year, the rate of return will “continue to benefit from reduced store labor and operating costs.”

The new store should help next year as well. It will open in Philadelphia, USA on September 16th, after the addition of 15 stores in Europe this year. Covid-19 restrictions “hinder the development of new store pipelines” and “make it difficult to access and evaluate potential sites and negotiate with potential landlords.” However, in the next fiscal year, we plan to add 500,000 square feet of additional sales space in Italy, Spain, the United States, Czech Republic and Ireland.

And while we haven’t planned to sell it online yet, it was interesting that retailers are working to improve their digital operations. “Digital has an important role to play as part of Primark’s marketing mix,” he said. This means a “new and improved” customer website.

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Primark suffered a Covid issue in the fourth quarter, but recovery is happening

Source link Primark suffered a Covid issue in the fourth quarter, but recovery is happening

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