The owner of budget fashion firm Primark has said 68,000 staff have been furloughed across Europe amid the coronavirus lockdown as it revealed a £284 million hit for unsold stock as all its stores remain shut.

Associated British Foods boss George Weston said the group had been "squarely in the path of this pandemic" but would not reopen Primark stores until the disease is under control.

Mr Weston told the PA news agency the company would have "had no option but to fire staff" were it not for the furlough scheme.

Primark has seen sales plunge from £650 million a month to zero as coronavirus has caused the 376-strong chain to shut completely, with no online business to fall back on.

Half-year results showed pre-tax profits slumped as Primark was left with piles of stock it was unable to sell amid the global coronavirus lockdown, falling 42% to £298 million in the six months to February 29.

Total charges in the first half soared to £309 million, compared with £79 million a year earlier, including the £248 million stock costs.

However, Mr Weston said the company would not launch online in a bid to shift stock it has been unable to sell.

He told PA: "We will sell that stock in stores but it might take a while.

"It might be in a year's time but it's not going to deteriorate and we will just have to wait until we can open stores again safely.

"I think this is the cost of Covid rather than not having online operations."

Primark revealed on Monday it had agreed to pay an additional £370 million to suppliers to cover stock currently in production or yet to be delivered after facing criticism over order cancellations during the coronavirus crisis.

The fashion chain said the deal will cover products which were in production or due for shipment by April 17, having previously committed to pay for orders which were in transit or booked for delivery by March 18.

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John Lewis Partnership said its Waitrose supermarket business has seen sales jump 8% since the end of January as shoppers stocked up on essentials in the face of the coronavirus outbreak.

Meanwhile, the John Lewis department store business saw online sales surge 84% since the middle of March.

However, it said this has not been enough to offset the impact of store closures, with total sales down 17% year on year since the middle of March.

In a letter to partners, recently appointed chairman Sharon White said: "We are confident that the future of the business is strong.

"Our short-term trading has though been significantly affected, principally because of the closure of all 50 John Lewis branches.

"The Partnership has been trading for nearly a century. It has survived a World War and bombings, economic crashes and crises.

"Thanks to you, we shall also come through Covid-19 and emerge stronger."

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Airline Virgin Australia has gone into voluntary administration after failing to secure a government bailout due to impacts of the coronavirus pandemic, the company said.

"Virgin Australia has entered voluntary administration to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the Covid-19 crisis," the airline said in a statement to the Australian Stock Exchange.

The move follows a board meeting of the firm's international shareholders who voted against providing more financial support.

The airline had asked the Australian government for £710 million but the request was denied.

Virgin Australia's board has appointed Deloitte has voluntary administrators.

The airline, which serviced domestic as well as short-haul international destinations, was founded in 2000 by Sir Richard Branson and was one of Australia's main aviation providers.

It "is not the end for Virgin Australia, but I believe a new beginning", Sir Richard said in a letter to the airline's staff which he tweeted.

He said: "Never one to give up, I want to assure all of you - and our competitor - that we are determined to see Virgin Australia back up and running soon."

 

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