Primark Owner’s Shares Tumble Over £190m Loss Due to COVID-19

  • Primark owner Associated British Foods (ABF Foods) shares dive due to coronavirus impact
  • Closure of European stores could leave a hole of £190m in sales
  • Stores in Italy, France, Spain and Austria account for 20% of retail estate
  • These stores generate 30% of Primark’s sales
  • UK sales also see decline due to reduced footfall
  • Too early to provide earnings guidance for the remainder of the financial year

Associated British Foods (ABF Foods), the owner of Primark, has experienced a significant drop in share value following its announcement about the impact of coronavirus on its sales. The company anticipates a loss of around £190 million due to the closure of stores in Italy, France, Spain, and Austria, which account for 20% of its retail estate and generate 30% of Primark’s sales. These stores have been closed as a result of the pandemic. The remaining stores, including those in the UK (41% of sales), are also experiencing declines due to reduced footfall. ABF stated that it is managing the business appropriately but does not expect to significantly mitigate the lost contribution from these sales. As the situation with COVID-19 continues to evolve, providing earnings guidance for the rest of the financial year remains uncertain.

Factuality Level: 10
Factuality Justification: The article provides accurate information about Primark’s financial situation due to the closure of its European stores and the impact on sales. It also mentions the company’s current cash position.
Noise Level: 3
Noise Justification: The article provides relevant information about the impact of COVID-19 on Primark’s sales and the company’s financial situation. It does not contain any irrelevant or misleading information, but it is mostly focused on reporting the news without in-depth analysis or exploration of long-term trends or consequences.
Financial Relevance: Yes
Financial Markets Impacted: Shares in Associated British Foods (ABF) have dropped significantly due to the closure of Primark stores in Europe and reduced sales in other regions, impacting financial markets and the company’s profitability.
Financial Rating Justification: The article discusses the financial impact on a major company (Associated British Foods) due to the closure of its stores and the effect on their shares and profits, making it relevant to financial topics and impacting financial markets.
Presence Of Extreme Event: b
Nature Of Extreme Event: Financial Crash or Crisis
Impact Rating Of The Extreme Event: Major
Extreme Rating Justification: The extreme event is a financial crisis due to the significant impact of COVID-19 on Primark’s sales and shares dropping by 100%, leading to a £190m loss in sales over the next four weeks.

Reported publicly: www.retailsector.co.uk