Primark's business model and strategy in value fashion retail

Primark: History, Growth, Products, Customers and Stakeholders

The world economy today has become more interrelated, consistent and unified nowadays than it was in any earlier phases of time gone by. This is because in present times there have been rapid variations and transformations in media, transport and communications technology. This rapid change cannot be found in any other area more than it is evident in the world of textile industry and clothing distribution. The consumer today yearns for chic, fashionable, smart, stylish and reasonably priced clothes ("Providing consumers with ethically sourced garments," p. 1, thetimes100.co.uk).

Various countries from every corner of the world are busy in fabricating high street fashion to a great extent. Industries and companies buy clothes from countries that provide the advantage of cheap labor costs and lower material. Bangladesh, China, India and Turkey are among such countries that offer the mentioned benefits to the businesses worldwide. Primark is a renowned clothing retailer that works with manufacturers all around the world with the sole intention of meeting consumer demands and requirements ("Providing consumers with ethically sourced garments," p. 1, thetimes100.co.uk).

Primark is a subsidiary of Associated British Foods (ABF) ("Providing consumers with ethically sourced garments," p. 1, thetimes100.co.uk). ABF is a highly branched out group of companies. It has the benefit of an elevated level of self-sufficiency as it runs significant businesses internationally. Four sectors i.e. Sugar and Agriculture, Retail; Grocery and Ingredients are operated by Associated British Foods (ABF) ("Associated British Foods plc," abf.co.uk).

Primark is an extremely flourishing and booming retail group in the value fashion sector. It is operating in Ireland, UK, Spain, Netherlands, Belgium, Germany and Portugal with a total of 223 stores ("Associated British Foods plc"). A major percentage of ABF "s revenues and earnings are originated by the annual turnover of Primark ("Providing consumers with ethically sourced garments," p. 1, thetimes100.co.uk).

The customers who are targeted by the Primark are fashion-conscious, trendy and stylish. The customers who want the value for their money move to Primark for all occasions. Primark is all set to present value for money by:

Supplying efficient products

Offering uncomplicated and simple designs for clothes

Making use of fabrics and trims produced locally

Offering the most popular, well-liked and admired sizes for men, women and children

Retailing dimensionally

Avoiding heavily-budgeted advertising

Primark has adopted the strategy of growing its business by meeting the above-mentioned customer needs. It has continued to increase the number of its stores and moving into new and latest markets. Primark has also espoused the approach to source the clothes it puts on the market in a principled, just and ethical way. This fair approach has often charged Primark an added cost to itself ("Providing consumers with ethically sourced garments," p. 1, thetimes100.co.uk).

History

The history of Primark as an innovative, pioneering and revolutionary retailer is full of success stories as it has continued to provide its customers with affordable fashion. Primark was brought into being with the purpose of offering a distinctive and inimitable combination of fast fashion along with lean functions. The Primark tale has been one of long-lasting triumph since its inception in Ireland when the first Penneys store was opened. At present, this story is in its continuation with the opening of the latest flagship store in Liverpool ("Company History," primark.co.uk).

The Foundation

It was at Mary Street, Dublin that the first Penneys store was inaugurated in June 1969. The number of stores increased to 5 within a year and all these stores were present in the Greater Dublin area. The first large store outside Dublin was opened at Cork the following year. By the end of 1971, the number of stores reached to thirteen out of which 11 were in Ireland and one was in Northern Ireland ("Company History," primark.co.uk).

Growth

Shifting to Great Britain

In Ireland, the number of stores had risen to 18 by 1973. It was at this period of time that Primark opened four out-of-town stores in Great Britain. This is how Primark commenced operations in Great Britain. In 1974, the first UK high street stores were opened in Derby and Bristol. There were 18 stores in the United Kingdom and 9 in Ireland by 1984. Thus, the number of stores reached to a total of 44 in Ireland and UK; 22 stores present in each country. The first compound acquirement also took place in 1984 when Primark purchased 5 Woolworth stores in Ireland ("Company History," primark.co.uk).

Further Spreading Out

In the next ten years i.e. from 1984 to 1994, the number of stores in UK reached to 32 with the opening of 13 more stores. In Ireland, the total number of stores reached to 34 with the opening of 12 new stores. Thus, by 1994, Primark had a total of 66 stores in UK and Ireland. One of the major purchases took place in 1992 when a 50,000 sq, ft. unit was acquired as a major flagship store at O'Connell Street, Dublin. Also in 1992, BHS left Ireland ("Company History," primark.co.uk).

Growth in Spain

The first Primark store in Spain was opened in May 2006 at Plenilunio, Madrid. Another store was opened in Murcia in September 2006. The Oxford Street in London saw the opening a 70,000 sq. ft. store in April 2007. In September 2007, the Primark Liverpool was opened. Two more stores started to operate in Jerez and in Xanadu, Spain in November 2007 ("Primark," primark.co.uk).

In 2008, a total of 7 new stores started functioning in Spain in the areas of Bilbao, Islazul, Oviedo, Parque Corredor, and Zaragoza, Asturias and in A Coruna ("Company History," primark.co.uk).

Development and Spreading out into the Netherlands, Portugal, Germany and Belgium

It was in December 2008 that the first Primark store was opened in the Rotterdam, Netherlands. In May of the following year, Portugal and Germany saw the inauguration of the first two Primark stores in Lisbon and Bremen respectively. In Frankfurt, Germany, the second Primark store was opened in November 2009. In December 2009, the second store in Portugal was opened in Porto. Also in the same month, the first Primark store started operating in Liege, Belgium. The first Primark store in Gran Canaria (Las Arenas, Las Palmas) began functioning in September 2010. In November 2010, a second Primark store was opened in the Netherlands (Hoofddorp). It was also in the same month that a third store in Gran Canaria (El Mirador) was opened. The third store in Germany was opened in Gelsenkirchen in December 2010 ("Company History," primark.co.uk).

Number of Stores Trading at 15th September 2011

Ireland

38

United Kingdom

Spain

20

The Netherlands

2

Portugal

4

Germany

4

Belgium

1

A total of 223 Primark stores are operating in Ireland, United Kingdom, Spain, The Netherlands, Germany, Portugal and Belgium at the moment ("Company History," primark.co.uk).

Employment

Total Number of Operating Stores

Total Number of Employees

Over 34,000

Total Selling Space in sq. ft.

7.28 million

("Associated British Foods plc," abf.co.uk)

Stakeholders

Primark is involved with multiple stakeholders and this association is remarkable. There are six ETI groups whose members are involved in working with Primark. A seventh ETI group has members who work as observers. Primark is also engaged in working with other world-famous brands like Cedarwood State, Butler and Webb, Backswing, Atmosphere etc. It has also assumed joint ventures with various NGOs and trade unions. Primark has also connected itself with the issue of 'homeworking' and is trying its best to improve the conditions in particular areas ("External stakeholders Let's Clean Up Fashion 2009," primark-ethicaltrading.co.uk).

Primark gives great emphasis to work closely with the concerned suppliers and factories that manufacture the items to be sold at Primark stores. Suppliers, factories and its own consumers are provided trainings to inculcate the ethical issues in them. For instance, guidance is offered regarding the issues such as child labor, immigration, and right to work. Primark is always keen while selecting new suppliers and factories. The chosen stakeholders are asked to pass a selection process. This is important for Primark in order to analyze the required appropriate working conditions or make necessary changes before it can approve a new supplier or factory to have an association with ("Providing consumers with ethically sourced garments," p. 3, thetimes100.co.uk).

Customers

It is a renowned actuality about Primark that it sells clothes that are at the budget end of the market. It mainly targets customers who are fashion-conscious and under 35 years of age. It offers first-rate, high-class and premium merchandise to its customers. Primark delights itself on providing products that are at value for what they cost. In short, Primark has based itself on loyalty and reliability towards its customers. According to a research, Primark is the 2nd largest clothing vendor in the United Kingdom ("Retail," abf.co.uk). Primark has also assumed certain cost saving strategies which has helped its customers to get the most unique and latest fashion in the most affordable prices. Primark spends no money on advertising. Instead, it has preferred the direct selling method to attract customers and increase the number of steadfast clientele. The company has also kept its overheads as low as possible. It has also stocked its stores with the newest fashions. Such intelligent aspects have made it possible for Primark to pass the cost saving advantages to its customers. Primark also puts great emphasis on quality assurance. Keeping a constant check on quality has enabled Primark to offer its customers a great value for their money. The Primark products are accurately and meticulously tested before, during and after various production stages ("UKS Team," ukshoppinginspain.com).

Products

Primark's products are based on up-to-the-minute fashion, value and inexpensive costs. The customers visit their nearest Primark store whenever they are in need of instant styles as they know that it is at Primark that they would find reasonably-priced, trendy clothes ("Products," primark.co.uk). The Primark teams in Dublin, Ireland that are responsible for buying and merchandising products and Reading in United Kingdom source and buy fashionable, modish and trendy items from different international markets. They purchase such items that are the reflectors of key fashion trends of the continuing season. One can buy different styles available at Primark for accessories, clothes and footwear for men, women and children. Hosiery and home ware items could also be easily found on Primark stores ("Retail," abf.co.uk).

Menswear

Primark offers menswear products with a range of brands from Backswing to Cedarwood State. It has put forwarded trendy clothes and accessories for all occasions. Men can get any stylish item from formal dinner suits and footwear to more informal denim and T-shirts look. It also offers a wide assortment of Cedarwood State and Butler and Webb cotton shirts, silk ties and suits. A full range of Backswing sportswear styles from golf wear to ski-wear can also be easily found at any Primark store. Not only this, Primark also offers the trendy men a collection of hats, scarves, wallets and bags to complete their looks and outfits. Thus, fashion-conscious males can find everything they need for topping off their appearances. Formally sophisticated to street-savvy range of footwear is also available for men at the Primark stores ("Menswear," primark.co.uk).

Womenswear

Primark prides itself on endowing the women with modern fashion at prices within their means. Primark offers a wide collection of skirts, trousers, cardigans, outfits, jackets that completes women's appearances so that they keep looking modish. It also offers pleasurable, flirty or well-designed lingerie. Accessories like bags and bracelets can also be found in latest fashions at Primark stores. In order to give the final touching to the women's dresses, a wide collection of footwear is also put up for sale in every Primark store ("Womenswear," primark.co.uk).

Childrenswear

Primark offers a wide range of products for toddlers and teenagers. It has all the right collection of items that could make a younger lady happy and cheerful. It also offers an extensive variety of cool, convenient, inexpensive and youthful clothes for the teenage lads. Primark has also got a delightful babywear collection. All the items that one could think of for satisfying the basic baby necessities to fashionable dresses are also easily available for both baby girls and boys ("Childrenswear," primark.co.uk).

Services

Primark strongly believes that it has a responsibility towards society and the people. Thus, it has adopted such ethical rules that help the company to do the right thing. It has taken the responsibility of looking after the business community i.e. its 34,000+ employees around the world. Primark has crystal-clearly stated that 'As an international brand with a global supply chain we have a responsibility to act ethically. We embrace this responsibility as an opportunity to be a great force for good. Primark is committed to providing the best possible value for our customers, but not at the expense of the people who make our products.' Primark makes it certain that its goods are manufactured under the best possible conditions and that its employees are not treated discriminatorily and unfairly at any level ("Providing consumers with ethically sourced garments," p. 2, thetimes100.co.uk).

Website www.primark.co.uk is the official website of Primark and has become one of the most popular and admired online shopping website among the customers. This website offers all the great Primark items including menswear, womenswear, childrenswear and home accessories ("UKS Team," ukshoppinginspain.com).

Conclusion

Along with other stores like Peacocks and H&M that provide inexpensive but up-to-the-minute fashion, Primark has been positive in promoting the rise of the 'bargainista'. It provides a guilt-free shopping experience to its customers as it does not promote child labor at any level. There are certain controversies that Primark is charged with now and then but none of the hullabaloos regarding the company has halted its continuous rise in the fashion market. Thus, it can be foreseen that the popularity of Primark will continue in the future too (Jackson 28).