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Stores with shutters mean Primark’s sales loss will exceed £ 1 billion

Primark had already said that the latest blockade would significantly reduce sales shortly after Christmas, but said Thursday that the total loss of sales for the last six months would be £ 1.05 billion.

Photo: Sandra Halliday

The company doesn’t have a reliable online operation, and once the blockade is over, customers return to the store rapidly, but the longer the blockade, the more revenue you lose.

In the 16-week renewal to January 2, retail sales were £ 2,031m, down 30% year-on-year due to UK and European regulations.It had a significant impact on the business from November to late December.

The estimated loss on sales during this 16-week closure period is £ 540m. However, while the store was open, transactions were strong “in light of the situation” and sales were down only 14% on a similar basis compared to last year. We also opened five new stores during this period, “in response to very positive customers.”

According to the company, performance varies from store to store and “reflects the general situation of customers at the time, such as working from home, reduced commuting, and reduced tourism.” Sales of stores in power centers exceeded the previous year, sales of shopping centers and local high street stores fell below last year, and stores in the city center of large-scale destinations that are heavily dependent on tourism and commuting continue to “Significant decrease” was shown. At your feet.

While the stores were open, transactions fell by just 10% across real estate on a similar basis, with the exception of stores at destinations in 16 major cities. Excluding Boston, the transaction performance of stores in the United States was “continuing to be strong, achieving sales on par with last year.”

sReflecting the excitement and widespread appeal of Primark products, the ale was strong at the stores that opened during the holiday season. ” The Christmas and gift lines were all sold out, and the “Stay-at-home order” product category, especially nightwear and loungewear, performed well. It is also encouraging that the level of price cuts was “significantly lower” than it was a year ago.

Similar to the inventory left in the spring of last year, the company announced that it will store around £ 200m of fall-winter goods in its warehouse later this year. In the meantime, all orders with that supplier will be “respected”.

The company has also succeeded in reducing operating costs by about 25%, but with 305 stores closed across the UK and Europe (equivalent to about 76% of real estate), there are limits to what can be done.

As mentioned earlier, the valuation of lost sales if these stores are currently closed is over £ 1 billion until the end of the current half (February 27). This is much wider than the £ 650m revealed on December 31st, based on the closing date announced at that time.

Based on this, Primark’s adjusted operating income for the first half of the year is expected to be a significant break-even point, with adjusted operating income of £ 441m for the same period in the previous fiscal year.

Also, if the store remains closed until the end of March, an additional £ 800m is expected to be lost in the first three months of the next six months. That would squeeze £ 300m in profits.

However, the company continues to open new stores, and although some stores have been delayed due to the blockade, it is scheduled to continue in 2021. This year, we plan to add 700,000 square feet of net sales space. We plan to open 15 new stores, 5 in Spain, 3 in the US, 2 in Italy, 1 each in the UK, France and the Netherlands, 1 in Poland and 1 in the Czech Republic (Prague).

Boston’s Downtown Crossing store will also shrink to 38,000 square feet, based on the successful resizing of several stores in the United States. “This will improve both the store’s profitability and the customer experience,” he said.

We have also leased new locations on Jamaica Avenue in Queens, New York, six in Italy, three in France, and Katowice in Poland and Brno in the Czech Republic.

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Stores with shutters mean Primark’s sales loss will exceed £ 1 billion

Source link Stores with shutters mean Primark’s sales loss will exceed £ 1 billion

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