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The global fashion business journal

19 Aug 201912:10

Primark, a decade to build a giant: more global, three times bigger and four times more profitable than in 2008

The company started half-century ago in Ireland, where it launched its first store in Dublin under the name of Penneys, and has becomed a global and world-known fashion company. 

02 Jul 2019 — 10:45
Iria P. Gestal
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Primark, a decade to build a giant: more global, three times bigger and four times more profitable than in 2008

 

From Penneys to Primark. From a small network of stores in Ireland to a global group. From the shopping centers in the outskirts to the macrostores in the prime. The king of low cost fashion celebrates his first half century of life turned into a giant. In the last decade alone, the company, owned by AB Foods, has tripled its turnover, multiplied its profit fourfold and landed in eight new territories.

 

Primark closed 2018 with a turnover of 7,477 million pounds (8,343 million euros), which places it as the seventh largest fashion retailer in the world. A decade ago, the chain's sales amounted to 2,134 million pounds (2,381 million euros), which ranked it number nine in the global ranking.

 

The operating profit of the company, for its part, has shot up even more, multiplying by more than four: from 186 million pounds (207.5 million euros) a decade ago to 843 million pounds (940.7 million euros) last year.

 

 

The group's growth has been driven by its expansion with stores and its international development: in 2008, Primark had 181 stores in three countries. Ten years later, it has 360 stores in eleven markets around the world, to which it has just added one more, Slovenia.

 

This has been the decade of Primark's overseas acceleration. The company, which continues to operate under the Penneys label in its local market, opened its first overseas store in the United Kingdom in 1973. It was then that it was forced to change its name, because JC Penney had registered the name throughout Europe, except on Ireland.

 

The next step of the group abroad did not arrive until 33 years later. In 2006, just before the outbreak of the crisis, Primark chose Spain to land in continental Europe. Then came Netherlands, Portugal, Germany, Austria, France, Italy and, this year, Slovenia. Poland and the Czech Republic are the other two countries in Primark's sights to open.

 

 

 

 

Its great ambition has been the conquest of the United States market, where the company landed in 2015. After trying to replicate his European strategy, with large stores on the outskirts, the group turned the rudder in 2016 betting on smaller stores in shopping centers.

 

On a global scale, the company has also changed its strategy, moving closer and closer to the prime axes, where its main competitors operate: large distribution groups. Once again, Spain was key in this new bet.

 

In 2015, Primark opened its largest store in the country on the Gran Vía in Madrid, a 12,500-square-meter macro flagship store, five plants, 91 testers, 131 cash registers and 580 workers, which soon became the second largest establishment in the country with more group’s invoice.

 

Earlier this year, the company gave a twist to its concept of retail with the opening in Birmingham of its largest store in the world. The establishment, of almost 15,000 square meters and five floors, includes a cafeteria, restaurants and manicure services. This development has been led by Paul Marchant, who relieved the founder of the chain, Arthur Ryan, in 2009.

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