Coronavirus: Primark rules out fire sale of excess stock when UK stores reopen

The owner of Primark has ruled out a fire sale of excess stock as trading prepares to resume in the UK following the coronavirus lockdown.

Associated British Foods (ABF) said it was aiming to reopen all 153 stores in England on 15 June – in line with government guidance covering operations for non-essential retailers as the COVID-19 health crisis eases.

The company said it anticipated that Primark stores in Scotland, Northern Ireland and Wales would follow later in the month, but it cautioned that the go ahead was yet to be granted by the authorities in those nations.

It has reopened some sites in mainland Europe with “reassuring and encouraging” results.

All UK sites were shut in March as the lockdown forced high streets to effectively shut down.

ABF told investors that it had no plans to launch an online operation despite the shuttering of Primark costing it around £650m for each month of the shutdown.

It said it had limited the financial damage by cutting costs by more than 50% and would roll unsold stock over rather than move to shift it at a loss to margins.

Shares in the company, which has wider interests including grocery and sugar divisions, were almost 8% higher in mid-morning deals having lost more than a quarter of their value in the year to date.

Commenting on the stock mountain, finance chief John Bason told the Reuters news agency: “What we will do, because we’ve got the financial wherewithal, we’ll carry it through to next year.”

ABF said: “As European governments have begun to ease restrictions on clothing retailing we have been able to reopen stores.

“Safety has been our highest priority in our detailed preparations to welcome our customers and employees back to stores. We are following government safety advice in all markets.

“Importantly, we will apply the valuable experience gained from more than 100 stores which are already open as we open the remainder of our estate, including stores across the UK.

“Social distancing protocols, hand sanitiser stations, perspex screens at tills and additional cleaning of high frequency touch points in the store are among the measures we are implementing.”

Source: Read Full Article