Budget fashion chain Primark, which has shunned the extra cost of home delivery, could add click-and-collect services to its revamped website over time, but it still sees new stores in markets such as Italy and the United States as it main growth driver.
The chain, whose trendy clothes at rock-bottom prices have taken British and European shoppers by storm over the last decade, will launch a new website in the United Kingdom by the end of March, and across its 13 other markets by the autumn.
That will better showcase its 10,000 products, provide customers with near real-time information on product availability by store, and enable Primark to mine the data of its over 24 million active ‘engagers’.
“We’re making the digital move forward in a very big way, in both the UK and the rest of Europe. That will generate sales and profits for us,” John Bason, finance director of Primark’s owner, Associated British (AB) Foods, told Reuters.
“Does this give us a capability to move further forward? Well, let’s have a look at that,” he said in an interview.
“If there was an e-commerce opportunity for us, it will probably be more in the area of click-and-collect,” Bason said, referring to products ordered online and picked up in store.
Bason said that home delivery remained off Primark’s agenda, as the economics don’t stack up for its low price points.
“You can’t get our value by delivery to home – it’s as simple as that,” said the 23-year veteran of AB Foods, which also owns major sugar, grocery, ingredients and agricultural businesses.
‘Huge Opportunity’
Founded by the late Arthur Ryan in Dublin in 1969, under the Penneys brand, Primark trades from 402 stores. It turned over £7.8 billion ($10.2 billion) before the Covid-19 pandemic, which hit it hard, as its stores were forced to close.
In November, AB Foods targeted an expansion of Primark to 530 stores over the next five years, accelerating growth in the major markets of the United States, France, Italy and Iberia.
“[The 530 stores are] not the end of the line,” said Bason. “There’s a long way to go with this business, in terms of adding space.”
Primark is confident that its model can succeed in a US market that has been a graveyard for some of Britain’s biggest retailers, including Marks & Spencer, Tesco, and Philip Green’s Topshop.
Bason said that the five-year plan would take it from 13 US stores to about 60 – all to the east of the Mississippi River.
That still leaves vast swathes of the United States unserved by Primark, including key states such as California.
“Without me being sort of categoric, you can see how you’d move into other geographies,” said Bason. “There is huge potential in the United States – there really is.”
‘Massive Runway’
He also believes that Italy provides a “massive runway”, noting that Primark recently opened its first store in Sicily – a market that has more people than the island of Ireland, Primark’s longest-standing market. It currently has eight stores in Italy.
“In Spain and Iberia, we have 65 stores. There’s no reason why Italy shouldn’t be that scale and go beyond that,” Bason said.
Primark has also dipped its toe into Central and Eastern Europe, opening stores in Poland, Czechia and Slovenia. The first store in Romania is slated for 2022.
Bason said that Primark’s plans for this region had not been altered by Russia’s invasion of Ukraine.
News by Reuters, edited by Donna Ahern, Checkout. For more retail stories, click here. Click subscribe to sign up for the Checkout print edition.
