Connect with us

Hi, what are you looking for?

Economy

Primark ‘will not go online’ despite £1bn loss during lockdowns

Primark

Primark says it has no plans to sell its clothes online despite warning that lockdown store closures could cost it more than £1bn in lost sales.

At the moment, 305 of Primark’s 389 global stores are closed – including all 190 of its UK stores.

But the retailer has no online operation to fall back on as it says the cost of setting one up would force it to raise its prices.

The brand’s sales fell 30% to £2bn in the 16 weeks to 2 January.

It contrasts with online only fashion retailers such as Asos and Boohoo, whose sales rose by around 40% in the last four months of 2020.

On Thursday, consumers called on Primark to embrace e-commerce with one tweeting: “Online sales are thru the roof during the pandemic. You’re missing out on a LOT of money.”

But the retailer tweeted back: “We prefer to sell our products in our physical stores but thanks for the suggestion.”

Since March last year, non-essential shops in the UK and overseas have faced strict curbs and prolonged closures and all are currently shut in England.

In a statement, Primark said that if all of its stores stayed closed until 27 February 2021, it expected to miss out on £1.05bn of sales – up from a previous estimate of £650m.

The retailer said it would partially mitigate this by cutting its costs, but did not say if that would mean job losses.

“On this basis, we expect the adjusted operating profit for Primark in the first half to be broadly break-even, which would compare to an adjusted operating profit of £441m for the same period in the last financial year,” it added.

‘Sales switched off’

In the past Primark has said it won’t sell online because the cos of manning such an operaiton and handling returns would mean it could no longer offer such low prices,

But Richard Lim of analysts Retail Economics said the inability to switch to online trading during periods of lockdown had been “laid bare” in its latest sales figures.

“As the lights went out across their store estate, sales were effectively switched off too while the competition pivoted to online platforms,” he said. “The longer these disruptions continue, the larger the price they will have to pay.”

Associated British Foods also owns food and agriculture businesses. Sales across the group were down 13% in the 16 weeks to 2 January at £4.8bn.

Read more:
Primark ‘will not go online’ despite £1bn loss during lockdowns

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Top News

Nikola, an electric truck startup, saw its stock price fly high as it went public and announced a deal with General Motors. A damning...

Top News

SEC probing Nikola Motors over short-seller claims of fraud – Business Insider Business Insider logoThe words “Business Insider”. 2020-09-14T23:20:04Z Massimo Pinca/Reuters The Securities and...

Top News

Trump paid over $70,000 on hair when he was on ‘The Apprentice’: NYT – Business Insider Business Insider logoThe words “Business Insider”. 2020-09-27T23:34:00Z Fred...

Stock

Stock Markets8 minutes ago (Jul 31, 2020 07:50PM ET) (C) Reuters. FILE PHOTO: James Murdoch, the son of media mogul Rupert Murdoch, and his...

Disclaimer: SecretsOfRichDads.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 Secrets Of Richdads. All Rights Reserved.