Primark’s parent firm says it has written down the value of the chain’s stock by £284m to reflect realistic pricing when stores re-open.
Associated British Foods (ABF) made the announcement alongside the group’s half-year results to 29 February which showed a 41% plunge in pre-tax profits to £298m. Operating profits were 38% lower.
Primark’s 189 UK stores were closed on 23 March – in line with the lockdown imposed by the government to tackle the spread of COVID-19 and manage the load on the NHS.
ABF said that while the half-year period did not cover the halt to Primark’s business, the ramifications of the closures could be reflected in the results which showed a total provision for the group of £309m.
The company said: “We have carefully reviewed the inventory on hand at Primark and, to reflect an expected lower net realisable value on some inventory when our stores reopen, this charge includes a £284m provision.
It has 376 Primark stores in total – all closed – and no online operation.
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