Primark owner warns coronavirus outbreak could threaten clothing supply

25 February 2020, 09:52

The retailer has warned it could see shortages if the outbreak worsens in China
The retailer has warned it could see shortages if the outbreak worsens in China. Picture: PA
EJ Ward

By EJ Ward

The owner of Primark has warned of a potential “risk of supply shortages on some lines” if the coronavirus outbreak worsens.

The high street giant sources numerous products from China, but has said it is "well-stocked with cover for several months" and does not expect any "short-term impact" as a result of the virus.

The fashion chain's owner Associated British Foods (ABF) warned the risk will come later in the year if factory delays in China caused by the coronavirus outbreak are prolonged.

ABF said it was making plans to deal with any fall out from the viral outbreak including the possibility of moving production to other regions.

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The group said Primark sales in the first half of the financial year are 4.2% higher than the same period last year, as it was boosted by recent site expansions.

The group said it was on track to post full-year figures in line with expectations, on the back of strong group sales and profits for the half-year to February 29.

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Associated British Foods said Primark's UK sales are expected to have risen 3% against last year following store expansions and openings.

Meanwhile, like-for-like sales are expected to have dropped 1.3% over the half-year period.

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The firm said UK sales were "particularly good" in November and December but have "weakened" in January and February.

Elsewhere, ABF said revenues in its sugar business are expected to improve on last year due to higher EU sugar prices and increased export sales.

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The firm's grocery business has seen revenues in line with expectations, while profits have improved against last year, as the firm benefited from reduced losses in its troubled Allied Bakeries business, which produces Kingsmill bread.

It said its Twinings tea business has seen higher sales than last year, driven by growth across both black tea and herbal tea.

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