Thursday 19 October 2017

Primark takes the next step in its campaign to conquer all of Europe

Company's emphasis on value for money and on-trend looks pays off in annual sales of over €3.5bn

Bairbre Power

Bairbre Power

However, while the buying team's fashion-speak reports "an ambiguity between masculine and feminine, luxury with grunge", there is nothing unclear about the sales performance of the company that was founded in Dublin in 1969 as Penneys.

Revenue for the Irish retailer, which is known as Primark outside Ireland, is up 17pc on last year, with annual sales of more than £3bn ((€3.5bn). Its formula of low prices and on-trend looks now has sartorial reach extending across eight European countries – soon to be nine.

France, the respected high altar of fashion chic, is now firmly within the sights of the 'value-for-money' retailer and CEO Paul Marchant says it will be shutters up there in late December.

However, despite all the speculation, Primark is not going straight for the Parisian jugular with its mix of women's/ men's/children's apparel. The company is saying "Bonjour" to France in the port city of Marseilles.

Some regard the Primark move into France as audacious but the company's rapid expansion into Europe – all planned from its HQ in Dublin's Mary Street – has defied convention.

Profits at Primark, which is part of Associated British Foods (ABF) and a sister company to Brown Thomas, have risen sixfold since 2000.

NEW STORE SALES BOOST

Sales for the financial year 2011-12 were £3.503bn, with £356m operating profit. The company has no e-commerce site, so it really is all about the footfall in its 257 stores, consisting of Ireland (38), UK (161), Spain (35), Germany (10), Portugal (6), Netherlands (4), Austria (2) and Belgium (1).

Primark's new store in Berlin enjoyed the best-ever opening day last summer. The crowds I witnessed massing for the opening day of Primark's new Frankfurt Zeil store bore out the reports I'd heard about the pull factor of the brand in Germany.

Buying director Ann Marie Cregan confirms that the average German shopping basket is larger. Shoppers are savvy, arriving in leggings and boots so they can try on stuff easily. Sales of skinny jeans are 20 times higher than in the average Primark store.

"There is an excitement about Primark in Germany that we didn't expect when we first opened and we are seeing people travel 300-400 miles radius to shop with us," said Ms Cregan.

"They are coming from eastern Europe and all over Germany and buying in multiples – sometimes the one thing in four different colours, which would be an unusual pattern to Ireland or the UK," she said.

It's funny who you meet when you step out of the path of hundreds of German fashion zealots. With seconds to go to the doors opening at Primark's tenth store to open in Germany in four years, I retreated to the side aisles and found myself leaning on the same rail as one of the most influential but media-shy bosses in international fashion retailing.

The smiling face belonged to Paul Marchant (45). Ex-New Look and Debenhams, Mr Marchant is an affable Englishman who was voted No 2 in the Top 100 by 'Draper's Record' last year.

Notoriously media-shy since he took over the powerful Primark gig from Arthur Ryan in 2009, Mr Marchant breaks into a wry smile as I take full advantage of this unexpected accessibility and whip out my dictaphone.

A quick congratulations about Frankfurt Zeil and I move the focus to France.

"It is a big market, a big population, 60+million, so it is a significant retail market," he says.

"This would be our ninth country and I think in the eight

countries we trade in so far we have proved that there is definitely customer appetite for the brand, so there is no reason France shouldn't be as much of a success as Germany or any other market."

The company's expansion across Europe, starting in Madrid in 2007, has been rapid and next year it is opening on the Gran Via, Madrid's equivalent of Grafton Street or Oxford Street.

"I honestly believe that in 1969 when Arthur (Ryan) founded the business, it was all about value, great products but great prices.

"As the business has evolved – and it has evolved rapidly over the last few years – it has become more fashionable. The environment has completely changed, but one thing that has never ever changed is the value.

"What we offer today is a product that is as exciting as you will see anywhere and in an environment that is as smart as you will see anywhere. We haven't moved from that position of being the best in class and price, which is why we get to take on the H&Ms on this important street in Frankfurt.

"We don't spend money on advertising. We do a bit of local marketing when we arrive in a new city, but actually all of the money that most retailers spend on marketing, we reinvest in value and therefore word of mouth spreads. Look at the number of times Primark is talked about on Facebook, Twitter, Pinterest, on instagram – it's a talked-about brand."

Managing the company's brand-speak is Breege O'Donoghoe, Primark's director of PR and human resources.

A veteran retailer, she was one of a handful of former Dunnes Stores executives who helped transform the Primark brand into a high-street success.

In Frankfurt, she addressed the crowd in word-perfect German for five minutes, a punchy speech from a talented linguist who took up Spanish after Primark opened there seven years ago

Annelie McCaffrey joined Penneys from sister company Brown Thomas where she was PR/marketing officer at BT2. The Penneys Facebook page was launched in September 2010 and is now on the cusp of its 500,000th Facebook friend.

With no e-commerce site of its own, Primark's move to join forces with online fashion retailer asos.com this month was flagged as being "for a limited time only". Sales were so good that they doubled the amount of styles on offer.

Primark's denim pieces are also on sale this month on the powerful e-tailer Selfridges.

A sister company within the ABF family, Primark's classic £9 jeans are being sold at the Selfridge's Denim Studio, up there with designer names like McQueen, J Brand and Levis and it also has a concession store within Selfridges in Oxford Street.

Irish Independent

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