Penneys owner to take €415m sales hit from latest Covid closures

Penneys on Mary Street. File picture: Sam Boal/Rollingnews.ie

The owner of Penneys has said it will take a £375m (€415m) hit from the loss of sales amid the latest enforced closures in the face of Covid-19.

Associated British Foods said around 57% of selling space in its Penneys and Primark stores will be temporarily closed if the UK Government approves plans to shut non-essential shops for a month from Thursday November 5.

On Saturday, British Prime Minister Boris Johnson confirmed that clothing stores will be among those required to close until December 2 as part of the second lockdown aimed at curbing the spread of the virus.

ABF said all Penneys and Primark stores in Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are already temporarily closed, representing 19% of selling space.

It also told investors that its trading hours have been restricted in a number of other key markets.

“Uncertainty about further temporary store closures in the short term remains,” it added, in a statement to the London Stock Exchange.

The retail giant said it is implementing operational plans which have been developed to “manage the consequences of closures” and is taking action to reduce its operating costs.

It also told shareholders that all orders placed with suppliers will be honoured.

The group added that, as of the end of its financial year on September 12, it had £1.5bn (€1.65bn) in cash reserves, with a total liquidity of around £3.1bn (€3.4bn) including lending facilities.

In September, ABF said a surge in summer sales had put it on track to top its profit targets for the year.

On Tuesday, ABF, which also runs a raft of grocery and ingredients businesses, will reveal its annual results for the financial year.