Primark, the global fashion retailer known for its affordable clothing, is set to reopen its stores in England on 15 June. This news comes as a relief for the company, which has been facing significant losses of £650 million in sales per month due to the lockdown and its lack of an e-commerce platform.
The reopening of Primark’s stores in other countries has already shown promising results. Early indicators suggest that consumer spending has been “reassuring and encouraging,” with popular purchases including kidswear, leisurewear, nightwear, shorts, and T-shirts. The good weather in these markets has also played a role in boosting sales.
Primark closed all of its stores worldwide on 11 March, resulting in a substantial loss of sales. In an effort to mitigate these losses, the company implemented cost-cutting measures and cancelled some forward orders. However, the primary reduction in overhead costs came from government employment retention schemes across Europe.
Currently, Primark has reopened 112 stores globally, accounting for 34% of its total selling space. The company has gained valuable insights from these reopenings and is confident in its ability to handle the reopening of its English stores on the same day.
With the reopening of its English stores, Primark will have a total of 281 operating stores worldwide, representing 79% of its total selling space. Additionally, three new stores that were originally planned to open earlier will also debut by 15 June.
As for the excess stock accumulated during the closure, Primark had £1.5 billion worth of stock on hand, in addition to commitments made to suppliers for an additional £0.4 billion. Most of the excess stock consists of everyday continuity, non-fashion, and non-seasonal ranges, along with some excess spring/summer stock.
Despite the challenges encountered during the reopening, Primark remains generally optimistic. Trading in reopened stores has been encouraging, with long customer queues outside and increased spending per visit. However, the company acknowledges that these results may not indicate a long-term trend.
While some stores have reported sales surpassing those of last year, others have struggled, especially those located in city centers heavily dependent on tourism and commuter footfall. Primark is continuing its cost-cutting initiatives and engaging in discussions with landlords to renegotiate lease terms in order to reduce overhead costs.
Overall, Primark is eager to reopen its English stores and believes that there is pent-up demand from consumers that will contribute to a successful recovery. With proper social distancing protocols and hygiene measures in place, the company is looking forward to once again serving its customers.