Outside of the world's largest Primark store in Birmingham, England.

LONDON — Primark will shut its U.K. stores on Sunday evening and has canceled all future orders due to the spread of the coronavirus, the company confirmed. The Dublin-based retailer had already closed Primark stores elsewhere in the  world, with the U.K. the last to remain open.

The company clarified that stock currently being shipped or sitting in warehouses will be paid for, but no more orders will be made.

“This situation has been so fast moving. We could not have foreseen that over the course of a week our stores in every country in which we operate, with the exception of the U.K., have had to close,” said Paul Marchant, Primark’s chief executive officer.

“We have therefore been left with no option but to take this action. We have large quantities of existing stock in our stores, our depots and in transit, that is paid for and if we do not take this action now, we will be taking delivery of stock that we simply can’t sell. This is unprecedented action for unprecedented and frankly unimaginable times.”

Marchant said the situation was “profoundly upsetting for me personally and for all of the team at Primark. We have worked alongside so many of our suppliers for many years and value our relationships enormously. We recognize and are deeply saddened that this will clearly have an effect throughout our entire supply chain.”

He added that Primark is in “close and regular contact” with suppliers and “very much hope that our normal trading relationships can resume as soon as possible. In the meantime, we are urging, in the strongest possible terms, governments in the countries from which we source our products, to take action in support of their local businesses and workers, in the same way that the U.K. and many European governments are doing,” about COVID-19.

A Primark spokesperson added that it was closing stores in the U.K. until further notice, with the health and welfare of employees and customers front of mind.

On March 16, Primark said in a trading update that the spread of coronavirus across Europe meant that stores accounting for 20 percent of its selling space were closed until the respective governments permit them to reopen.

Associated British Foods, Primark’s parent, said those stores — in countries including Italy, France, Austria and Spain — currently generate 30 percent of Primark’s sales.

“From the date of this announcement, we had expected sales of 190 million pounds from these stores over the next four weeks. The remainder of the estate, including the U.K. which represents 41 percent of sales, has seen like-for-like sales declines over the last two weeks and these have accelerated over the past few days as a result of reduced footfall,” the company said last Monday.

ABF said while it was managing the business “appropriately,” it does not expect to “significantly mitigate” the effect of the contribution lost from these sales.

At the time, the company said it was too early to provide earnings guidance for the remainder of the current financial year.

“The group has a strong balance sheet, substantial cash liquidity with some 800 million pounds of net cash at the half-year and significant undrawn bank facilities,” said ABF, adding that the group will provide a further update with interim results on April 21.

On Friday, March 20, the British government took the historic step of promising to pay 80 percent of all British employees’ salaries if they could not work due to the virus. The government, which also announced that all restaurants, pubs, nightclubs, gyms, bars, theaters and galleries would shut immediately, will also allow businesses to defer VAT, or value added tax, until later this year.

Earlier in the week, the government laid out a 350 billion pound emergency support package for all businesses.

load comments
blog comments powered by Disqus