Subway and H&M succumb as retail battered amid Covid19 outbreak

Subway and H&M succumb as retail battered amid Covid19 outbreak
A Primark store in the UK yesterday announcing its closure. Primark has now shut all 376 of its stores. Picture: Tim Goode

Fast-service sandwich chain Subway and clothing retailer H&M are the latest high-street businesses to take a hit from the Covid-19 outbreak.

Subway has closed all of its stores in Ireland and the UK to guard against the further spread of the virus.

“We took this decision as we want to continue doing everything in our power to keep people safe,” said Colin Hughes, Subway’s country director for the UK and Ireland.

It follows similar Irish market announcements by Supermac’s, Starbucks, McDonald’s, and Nando’s.

H&M, the world’s second largest clothing retailer, has scrapped its proposed dividend due to coronavirus, and is reviewing all parts of its operations, including all costs.

The historic move by H&M to scrap its dividend comes with 68% of its stores closed as the pandemic is hitting the global clothing retail industry relentlessly.

Meanwhile, the owner of discount clothing retailer Primark, which trades here as Penneys, has said it will take a £650m (€710m) hit to net sales for every month Covid-19 forces it to keep shops closed.

UK conglomerate Associated British Foods (ABF) has closed its Primark stores in the UK, which represent 41% of annual revenues.

Penneys stores in Ireland were closed last week, as were Primark stores in Europe and the US.

All of the group’s 376 Primark/Penneys stores, across 12 countries, are now closed and ABF has stopped placing new orders for the shops. The group said it is hopeful of recovering 50% of total operating costs for its Primark/Penneys business.

The outbreak continues to affect the airline sector. Stobart Air, which operates the Aer Lingus Regional service, will suspend all flights outside of Ireland from Saturday. It will continue to operate its public service obligation routes from Dublin to Kerry and Dublin to Donegal.

Separately, Aer Lingus last week said it would be halving overall pay and working time for all employees, including management, as it cuts flight capacity by at least 75%.

G4S, one of the world’s largest private security firms, said it will suspend its dividend due to uncertainty stemming from the pandemic and the impact it may have on key markets.

B&Q owner Kingfisher, which closed some shops last week, has postponed issuing its financial results, as per a widespread call from the UK’s financial watchdog, but said while annual revenues were slightly down, it saw a fourth-quarter bounce in its troubled French operations.

Elsewhere, food giant Nestle told employees to prepare for difficult times ahead and make all the necessary efforts to supply customers with the food and beverages they need.

“Please get ready for the storm to hit — because hit it will,” chief executive Mark Schneider told staff.

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