July 12, 2020 / 3:07 PM / a month ago

Primark rejects 30-million-pound UK bonus for bringing back staff

FILE PHOTO: A shopper checks products inside a Primark store in Oxford Street, after its reopening amid the spread of the coronavirus disease (COVID-19) in London, Britain June 15, 2020. REUTERS/Hannah McKay/File Photo

LONDON (Reuters) - Primark, the fashion retailer owned by AB Foods (ABF.L), said on Sunday it would not take advantage of a British government scheme to pay employers for bringing back staff from furlough, eschewing a bonus of about 30 million pounds ($38 million).

Primark closed all of its stores in March when the COVID-19 outbreak in Europe intensified, costing it about 650 million pounds in net sales a month.

Across Europe 68,000 staff received furlough payments from governments, without which it said it would have been forced to make most redundant.

It has since reopened stores, including sites in Britain last month, where around 30,000 employees were furloughed.

“I can confirm that Primark does not intend to take advantage of support under the Job Retention Bonus announced by the Chancellor this week,” a spokeswoman said on Sunday.

“The company removed its employees from government employment support schemes in the UK and Europe in line with the reopening of the majority of its stores. The company believes it should not be necessary therefore to apply for payment under the Bonus scheme on current circumstances.”

The bonus scheme, which could cost up to 9 billion pounds if employers brought back all 9 million people who have been on furlough, was announced on Wednesday and also applies retroactively.

Reporting by Paul Sandle; editing by Emelia Sithole-Matarise

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