Store closures hammer Primark sales as Boohoo exceeds expectations

Primark’s sales fell 30% in the 16 weeks to January 2 in constant currency and 28% in actual exchange rates.

The high street favourite experienced a swathe of restrictions on its stores in the UK and Europe ranging from limited opening hours to full closures, throughout the festive period.

Primark has estimated a loss of sales worth £540m during the 16-week period due to the store closures, while its half-year expectations to February 27 have almost doubled to £1.05bn with the assumption that these measures will continue until then.

Primark has said it is now implementing 25% in operating costs across the business in order to mitigate its losses and expects its adjusted operating profit for the half to “broadly break even”.

When stores were permitted to open, the retailer said sales were on average 14% lower than the previous year on a like-for-like basis, with sales higher in its retail park locations compared with city centres.

It also said trading on its Christmas ranges and “stay at home” categories such as loungewear and nightwear were particularly strong when stores were open.

Boohoo has seen sales rocket throughout the pandemic, as customer spend shifted online.

The fast-fashion etailer reported a sales growth of 40% in the four months to December 31, exceeding expectations.

Boohoo, which owns its eponymous brand along with BoohooMan, PrettyLittleThing, Nasty Gal, MissPap, Oasis, Warehouse, Karen Millen and Coast, expects full sales growth for the full financial year to February 28 to be 36% to 38%, up from previous guidance of 28% to 32%.

Its EBITDA expectations remain the same at 10% growth year on year. 

After purchasing Oasis and Warehouse out of administration in June, Boohoo has also successfully integrated and relaunched the brands as online-only on its own platform.

The fashion group intends to finish work on an extended warehouse capacity in April, creating 1,000 jobs, to service Oasis and Warehouse alongside its other brands.

Chief executive John Lyttle said: “I’m delighted with the group’s performance over the peak trading period. Our team worked exceptionally hard in 2020 as we navigated the many challenges, including the Covid-19 pandemic and the successful acquisition and integration of Oasis and Warehouse. 

“Growth has been strong across our multi-brand platform and we have continued to grow our market share across all geographies. 

“The group is in an excellent position entering 2021, which we expect to be another year of progress towards our goal of leading the fashion ecommerce market globally.”