Coronavirus could hit Primark supply chain

The coronavirus outbreak is set to create factory production delays in the supply chain of fashion retailer Primark’s parent company Associated British Foods.

In a trading update released today ABF said: “Primark sources a broad assortment of its product from China. We typically build inventories in advance of Chinese New Year and, as a consequence, are well stocked with cover for several months and do not expect any short-term impact.

“We are working closely with our suppliers in China to assess the impact on their factories and supply chains and their ability to fulfil our current orders. If delays to factory production are prolonged, the risk of supply shortages on some lines later this financial year increases. We are assessing mitigating strategies, including a step up in production from existing suppliers in other regions.”

Associated British Foods also said that first-half sales at Primark were expected to be 3% ahead of last year, driven by a strong contribution from new selling space.