Last checked at 
* 74 Primark stores in Italy, France, Spain, Austria closed
* Sales in rest of Primark estate down over last two weeks
* Other businesses not impacted materially by virus
* Shares down 11.6%, rivals' share prices also lower
(Adds detail, FD comment)
By James Davey and Tanishaa Nadkar
March 16 (Reuters) - Associated British Foods has
been forced to close 74 Primark fashion stores in continental
Europe due to government measures to combat coronavirus, while
sales have fallen in those still open, it said on Monday.
Shares in AB Foods, which also owns major sugar, grocery,
ingredients and agriculture businesses, slid 13% by 1108 GMT
after it also said it could not provide earnings guidance for
the full 2020-21 year due to the uncertain outlook.
Rivals' share prices also fell sharply - Marks & Spencer
was down 17.4% and Next was down 11.9%.
“There is no doubt that all clothing retailers are seeing
lower demand...Peoples’ immediate priorities are in other
areas," AB Foods' finance director John Bason told Reuters.
The group said it closed 20% of Primark's selling space in
continental Europe which the World Health Organisation says is
now the epicentre of the coronavirus outbreak.
Primark generates about half of the group's revenue and
profit.
Primark stores in Italy, France, Spain and Austria were now
closed until their respective governments permit them to
re-open. AB Foods said with these stores generating 30% of
Primark’s sales, the group had expected sales from them of 190
million pounds ($233 million) over the next month.
The group said the remainder of the Primark estate,
including Britain which represents 41% of sales, has seen
like-for-like sales declines over the last two weeks which
accelerated over the past few days due to reduced footfall.
The group does not expect to be able to significantly
mitigate the lost Primark sales. However, it has not seen a
material impact in its sugar, grocery, ingredients and
agriculture businesses, from the outbreak.
AB Foods' brands include Silver Spoon sugar, Kingsmill
bread, Twinings tea, Ovaltine and Jordans cereal.
"We’re prioritising the production of food," said Bason.
"It shouldn’t be lost in this that whilst we’re talking
about financial guidance, it's our responsibility to keep food
production going. All of our food factories are doing that," he
said.
In February, AB Foods had highlighted the risk to supply of
goods from its suppliers in China.
It said that since then, the situation in China has
improved, with most factories supplying Primark having
re-opened. As a result, supply shortages from China are now
expected to be minimal.
The group also said it has a strong balance sheet,
substantial cash liquidity with some 800 million pounds of net
cash at the half year and significant undrawn bank facilities.
($1 = 0.8145 pounds)
(Reporting by James Davey in London and Tanishaa Nadkar in
Bengaluru, Editing by Devika Syamnath and Emelia
Sithole-Matarise)
