Since the mid 2000s, Primark has emerged as one of the UK's most successful high street chains, now the country's biggest clothing retailer by volume, and the #2 by value behind Marks & Spencer. It is the clear leader in the budget sector, having overtaken Asda's George in 2007. It was named as Value Retailer of the Year in that year's Drapers Fashion Awards, and has collected that or a similar accolade virtually every year since then, most recently in 2014, as best international fashion retailer. The company is best-known for high-quality merchandise at extraordinarily competitive prices. Like Zara, Primark has streamlined production systems to ensure the fastest possible turnaround of new designs, and it operates an exceptionally effective buying policy, outsourcing all manufacturing to developing markets, though this has led to repeated accustions of unethical trading, which the company has worked hard to remedy. Costs and overheads are stripped to the bone, with the result that almost nothing in Primark's UK stores costs more than £20. The chain's reputation belies the comparatively small size of its retail estate: just 384 stores globally, though the UK remains the biggest market with 190 outlets. Primark continues to operate in the Irish Republic under its original name of Penneys, and there is a growing estate of stores in continental Europe. Spain was the first destination in 2006, and there are now also outlets in the Netherlands, Germany, Italy, France and several other local markets. The first outlets in Eastern Europe opened in Poland in 2020. Oddly perhaps, the brand has arguably accumulated greater prestige among its customers in mainland Europe, where it is seen as a fashion expert, than in the UK, where many even among its own customers still regard it as a cheap and cheerful discounter, ironically nicknamed "Primarni". The first US stores opened in 2015. However that market has proved especially challenging. Perhaps the most startling thing about Primark is that it is virtually alone among the major retail chains to still have no full ecommerce operation. The group tested online sales for the first time during 2013 in a limited partnership with e-tailer Asos, but that trial came to an end before the end of the year and was not renewed. The business is the remaining UK retail interest controlled by diversified conglomerate Associated British Foods, whose other divisions are involved mainly in packaged foods and ingredients manufacturing. It is the biggest operating business within ABF, accounting for just under half of combined group revenues, and over half of profits. However, it took a significant hit from Covid-enforced closures during 2020, with revenues plunging from £7.8bn to £5.9bn for the year to Sept 2020. Operating profit fell by two-thirds to £362m. Paul Marchant is chief executive; only the second in Primark's 50-year history. He succeeded Arthur Ryan, who led the business for 40 years from its creation in the late 1960s in Ireland as Penneys.
Capsule checked 2nd Apr 2020
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Historical profile information for Primark
Adbrands Weekly Update 22nd Sep 2016: Associated British Foods - which despite its name actually generates some 60% of its profits from the discount clothing retailer Primark - warned that like-for-like sales for that business fell 2% in the financial year just ended, the first such decline in 16 years. Primark has proved an extraordinary growth motor for the group, outperforming its more traditional grocery and ingredients operations. However, according to the group, "unseasonable weather" caused a slowdown in same-store sales in the most recent year. The chain is also virtually the only major fashion store not to sell its clothes online. However, managers and some analysts argue that the same-store decline merely reflects the sharp decline across the whole UK clothing market: "this is a market issue not a Primark issue". Despite the slowdown, Primark's reported sales are expected to rise by 11% as a result of new store openings and currencies.
Adbrands Weekly Update 21st April 2016: British fashion chain Primark reported its first ever decline in like-for-like trading for the six months to February as a result of unseasonably warm weather across Northern Europe, where most stores are situated. However, new store openings in Spain and Italy and encouraging trading in the two new US outlets resulted in a 5% increase in reported revenues (7% at constant rates) to almost £2.7bn. George Weston, chief executive of parent group Associated British Foods, said, "Primark's trading has only been marginally down in the UK, which had been a tough market. In the rest of Europe the numbers are good." The UK accounts for just under half of Primark's sales.
Adbrands Weekly Update 5th Nov 2015: Discount fashion chain Primark was again the star performer among the collected businesses of diversified conglomerate Associated British Foods. Strong international growth, especially in France, helped Primark's revenues to rise by a further 8% to a record £5.35bn, and the first US store opened in Boston in September, just before the group's fiscal year-end. Primark's strong showing offset declines elsewhere in the group, including in its large groceries division, where revenues slipped 5% to £3.2bn. There were even steeper declines in the sugar and agriculture divisions. Group revenues came off 1% to £12.8bn, but pretax profit slumped 30%, as a result of higher commodities, weak trading and impairments against one of its industrial joint ventures.
Adbrands Weekly Update 6th Nov 2014: Low cost fashion retailer Primark delivered another extraordinary performance in the year to Sept 2014, with revenues up by 16% to £495bn, and a 29% jump in operating profit to £662m. Though much smaller than rivals H&M and Inditex, Primark is still delivering much stronger growth, with a growing footprint across Europe. The key challenge ahead is the chain's debut into the US next year. Primark was, as usual, the star performer among Associated British Foods' various businesses. Group revenues slipped 3% as a result of currency fluctuations to £12.9bn. At constant rates growth would have been 1%, but that increase was generated entirely by Primark, with virtually all of ABF's food divisions reporting a decline at constant rates.
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