The conglomerate Associated British Foods (AB Foods) is currently struggling with problems. Due to the ever higher prices for materials, energy and raw materials caused by the war in Ukraine, it is assumed that the profit margin in this area will be significantly worse than initially assumed. This reports “Boerse-Online.de”.
The constantly rising costs will therefore also affect the business of the subsidiary Primark. It is assumed that the textile discounter’s revenue in the second half of 2022 will be above the pre-crisis level of 2019. At the same time, according to the calculations, the margin will be around ten percent lower than initially hoped.
To compensate for this, the prices for T-shirts and Co. at the fashion chain will most likely have to be raised significantly.
Primark is raising prices: Textile discounter could not compensate for losses caused by Corona
In the first half of 2022, AB Foods was actually able to benefit from the many reopenings of the Primark branches after the corona restrictions. The operating result even rose from 43 to 414 million, almost ten times as much. However, the losses from the first year of the corona restrictions could apparently not be compensated for, which is why customers are apparently being asked to pay more.
It was only announced last month that Primark would be closing branches in Germany for the first time. According to the group, these are “no longer commercially attractive”. You can find out more about this topic here.