Primark owner to repay furlough cash as reopened stores deliver record sales

Primark revenues fell 41% in constant currency to £2.2m in the 24 weeks to February 27, while its adjusted operating profit fell 90% to £43m.

As reported previously, Primark estimates that loss of sales amounted to £1.1bn in the periods where its stores were closed and like for likes were down 15% when stores were reopened due to Covid-19 restrictions.

In the UK, like-for-like performance was down 6% in the first half of the year and down 1% excluding four major city stores.

Unlike in the first lockdown, at no point was Primark’s entire store estate closed – all of its US stores remained open throughout the six-month period, with like-for-like sales down 11%, or 3% excluding the city centre Boston store.

Primark has also introduced a pre-booking system for its stores in the Netherlands, Belgium and Germany so it can continue to trade safely.

The fashion giant reopened its doors in England on April 12, and said that over half its stores broke their sales records in the first week, driven by increased basket sizes and strong footfall levels across all destinations.

Popular purchases included nightwear, lingerie and leisure wear, but Primark said that demand for its fashion womenswear also exceeded expectations.

On the assumption that its UK stores remain open, Primark has said it will repay £121m it received as part of the government job retention scheme that helped it to preserve the jobs of its 65,000-strong workforce.

AB Foods chief executive George Weston said: “With most of the Primark stores closed for more than half the period, the management team demonstrated operational agility in response to the measures employed by governments to tackle the pandemic. 

“Primark sales after store reopenings demonstrate the relevance and appeal of our value-for-money offering. We are excited about welcoming customers back into our stores as the lockdowns ease and are delighted with record sales in England and Wales in the week after reopening on April 12. 

“With our success in a number of new markets, as wide-ranging as Poland and Florida, we are as convinced as we have ever been in the long-term growth prospects for Primark.

“Looking ahead, with stores reopening and Primark once again becoming cash generative, our confidence is reflected in our decisions to repay the job retention scheme monies in respect of this financial year and to declare an interim dividend.”