Business Irish

Thursday 21 August 2014

Thousands of bargain-hunting Berliners descend on new Penneys store

Taoiseach Enda Kenny opened store in Berlin's iconic Alexanderplatz

Daniel McConnell in Berlin

Published 03/07/2014 | 10:03

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We almost take it for granted at home but today, Berliners queued in the centre of the city this morning ahead of the official opening of a Penneys.

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Operating under its international brand name, Primark, the store is officially being opened by Taoiseach Enda Kenny in the iconic Alexanderplatz.

A “creative protest” is to take place outside by fair trade groups who want greater transparency in the Penneys supply chain.

Police were hand to steer the thousands of shoppers expected to converge on the 5,000 sq m store.

The fashion chain now operates 13 stores in Germany. It now has 276 outlets across Europe.

But for average Berliners, the store's opening is the cause of genuine interest, with some local media describing it as "Primania".

Penneys, which trades as Primark outside Ireland, was founded by Dubliner Arthur Ryan in the 1960s.

Primark, owned by Associated British Foods, is accelerating the pace of its expansion in Europe, and in April announced it would open its first U.S. store in Boston towards the end of 2015.

The company has grown rapidly during the economic downturn in Europe due to its rock-bottom prices and fast-changing fashions.

However, it has also drawn criticism for conditions in the factories of its suppliers, especially since more than 1,100 people died last year in the collapse of a plant in Bangladesh, where clothes were made for brands including Primark.

Primark's success is squeezing margins at Sweden's budget chain H&M, which is also trying to improve its reputation for ethical standards, particularly in its biggest market Germany, where shoppers are particularly sensitive to environmental issues and labour rights.

However, those concerns were trumped on Thursday by the desire to snap up T-shirts for €3 and skinny jeans for €7, as thousands of shoppers, including dozens of mothers with small children, lined up hours before the store opened.

"Primark is criticised but it is not just Primark. All the big stores are the same, including H&M, because we want to have things cheaper and cheaper," said 16-year-old shopper Anna Schmidt. "I am not prepared to pay €30 for a T-shirt".

The new store is Primark's 13th in Germany, and it has set its sights on eventually opening more than 100 in the country, which is already home to more than 400 H&M stores.

HOAX LABELS?

Primark, which generates almost a third of AB Foods' group sales, attracted negative headlines again in recent days after labels were found sewn in garments sold in Britain purportedly from workers complaining about their working conditions.

Wolfgang Krogmann, chief executive of Primark Germany, dismissed the labels as a hoax and said the company tightly controls factory conditions, conducting 2,000 audits a year and adding it does not allow approved suppliers to subcontract.

"Ninety-eight percent of factories are shared with other brands that are making similar garments for our competitors. The difference with us is that we charge a particularly low price for the same product," he told journalists.

At the official store opening, Primark board member Breege O'Donoghue, wearing a cream jacket with gold buttons and slim fitting trousers she said only cost 42 euros, noted that Primark has been praised by the Ethical Trading Initiative, a London-based group campaigning for worker rights.

The Taoiseach, who cut a ribbon before shoppers stormed the store, said he was proud of Primark's success and convinced by its commitment to ethical standards.

"The queues outside certainly show the strength of Primania across Germany and across Europe," he told cheering staff.

The crowds outside the new store on the busy Alexanderplatz square were not deterred by dozens of protesters holding banners with slogans like "Crime-ark" and "Fast Fashion Kills".

"Fast fashion means there is extreme pressure to meet orders. They must produce fast, fast, fast which causes accidents," said Berndt Hinzmann from German development group Inkota Network, which helped organise the protest.

"We consciously don't call for a boycott. That would mean that the factory workers wouldn't earn anything. The companies should not leave Bangladesh. They should recognise the problems and introduce structural changes."

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