Primark owner warns coronavirus threatens clothing supplies

LONDON (Reuters) - Primark owner Associated British Foods (ABF.L) warned on Monday there was a risk of supply shortages on some lines later in the 2019-20 financial year if delays in factory production in China are prolonged due to coronavirus.

AB Foods, which sources a broad assortment of its product from China, said it typically builds inventories in advance of Chinese New Year and, as a consequence, is well stocked with cover for several months and does not expect any short-term impact.

“We are assessing mitigating strategies, including a step up in production from existing suppliers in other regions,” it said on Monday.

The group also owns major sugar, grocery, ingredients and agriculture arms.

Several of its food businesses have operations in China. It said the China sugar campaign was completed in January before the coronavirus outbreak developed significantly.

The group said its AB Mauri, AB Agri and Ovaltine factories are operating, but at reduced capacity due to labour and logistics constraints.

AB Foods forecast first-half sales and adjusted operating profit ahead of the previous year. Its outlook for the full-year is unchanged.

Primark’s first-half sales were forecast to be up 4.2% on a constant currency basis.

Reporting by James Davey; editing by Kate Holton and Paul Sandle

Our Standards:The Thomson Reuters Trust Principles.
Reuters, 24 Feb, 2020

More Business & Finance News

Capital One says it won't use CFTC waiver related to oil lending

View detail

Single passenger flights: The daily woes of airlines, and the crew still working

View detail

Latest Gold Rates In Karachi

View detail

Exclusive: Amazon in contact with coronavirus test makers for potential screenings on employees

View detail

Mexican president calls on Russia, Saudi Arabia to end oil price war

View detail

Disclaimer: All information on this page are taken from third party reliable sources of relevant industry channels, with simple aim just for general information for our users. Hamariweb never endorse or recommend for any trading advice as well as accuracy of data provided here.