Primark Closes All Stores After Pandemic

(Bloomberg) --

Primark, the budget fashion chain owned by Associated British Foods Plc, has closed all of its stores due to the spread of the coronavirus, which will strip 650 million pounds ($760 million) from revenue each month the shops are shut.

• Primark had closed 20% of its selling space as of March 16, and on Sunday it shut all stores in the U.K., which generate 41% of its revenue. Separately, Kingfisher Plc said it won’t pay a final dividend and has closed all stores in France and Spain.

Key Insights

• Primark contributes more than half of AB Food’s profits, so this will hobble the company. The next step is cost cutting, and Primark is in talks with landlords and is reviewing all spending.
• This will put a shock on suppliers, as Primark has stopped making any new orders. A slight balm is that the company said it hasn’t seen any material effect from the pandemic on its sugar, grocery, ingredients and agriculture businesses.
• British clothing chain Next Plc also announced plans to close all U.K. stores temporarily, as did Greggs, the bakery and food-to-go retailer. Next’s online business remains open.
• Kingfisher delayed its full-year results for two weeks at the request of the Financial Conduct Authority.

Market Reaction

AB Foods fell more than 7%. Kingfisher rose 14%.

Get More

• For more on ABF’s report, click here.
• For Kingfisher, click here.

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