The British company Associated British Foods (ABF), which also owns Primark, has warned of hundreds of job cuts at the fast fashion retailer. The job cuts are intended to cushion the increasing cost pressure.
The company announced that it would cut around 400 managerial positions in the UK in order to simplify the administrative structure in its branches. Primark plans to cut a number of jobs, as well as create a new entry-level managerial position, a spokesman told Sky News.
The retailer currently employs around 29,000 people across 191 stores in the UK. The news came even as Primark’s UK sales rose 36 percent year-on-year to £2.67 billion in the 16 weeks to 8 January. However, the retailer warned that while sales were well above last year’s – which saw widespread store closures across the UK and Europe – they were still 10 per cent below pre-pandemic levels.
Omicron demands its price
Primark said sales during the all-important holiday shopping season were impacted by a drop in footfall due to the rapid increase in Omicron cases. However, they have improved in recent weeks. Richard Lim, CEO of retail economics consultancy, commented on Primark’s results, saying: “A strong increase compared to last year’s severely constrained selling period is great news for the retailer, but these results have a sobering edge.”
“Consumers are now very savvy about shopping online. As cases increased, their self-imposed restrictions were matched by a shift to alternative brands that met their needs,” said Lim, commenting on the impact of the lack of online presence in Primark’s business model “Without a transactional website to fall back on, Primark has had to frustratingly leave key sales to the competition.”
This article was previously published on FashionUnited.uk. Translation and editing: Karenita Haalck