The Irish born retailer entered America’s market 46 years after its first launch. The chain unveiled more openings in the pipeline following the slow growths since its entry.
Primark has done one what other retail giants across the world still struggle to achieve, which is entering America’s market, even giants such as Inditex still battle to get to Primark’s level in Northern America. That being said, everything hasn’t been as rosy as it may seem for the low-cost fashion retailer. It has witnessed a rather slow growth in its five years in America, with the opening of only 9 stores out of the 373 stores it holds overall.
The low-cost retailer wrestled to find its place in the American Market, which is the biggest
market in terms of fashion sales and one of the most complex alongside the high competition. With all prior factors impacting the growth of the Irish retailer in the foreign market, it managed to keep its head above the water through trial and error because it seems as though Primark’s Irish luck may just withstand the US.
The US recently experienced an anticlimactic end of the year, with retail sales of apparel, accessories, and footwear, ending the year 2019 with a decrease of 0.6%, according to data from the United States Census Bureau. The Irish retailer continues to defy the difficult phase faced by the retail industry, at a slow rate possibly, nevertheless playing it safe in a foreign country may have been Primark’s survival strategy. The retailer recorded revenue of 7.8 billion pounds (10.2 billion dollars) for its 2019 fiscal year, margins up by 11.7, a slight increase from the previous year’s results.
The retailer recorded revenue of 7.8 billion pounds (10.2 billion dollars) for its 2019 fiscal year
It wasn’t too long ago that Primark first breached the US borders. The start of its measured invasion dates back to September 2015, when it opened its first flagship store in Boston, introducing its products to a myriad of Americans, thirsty for its EDLP (everyday low price) model, a system that different from the majority of other US retailers who were used to operate with extensive discounting, promotions and coupons amongst others.
The low-cost retailer’s expansion in America does not mirror that of Europe’s, which counts 138 stores in Europe in 8 countries excluding the ones in the UK and the Republic of Ireland, who together alone account for 226 stores. Primark ended 2019 with an operating profit of 8%, to 913 million pounds (1.1 billion dollars) for-like-sales, down 2% on a global scale. In its 2019 report, the company highlighted its strong trading in the UK, Spain, France, Italy and in the US. The budget fashion chain highlighted ‘strong’ sales of its business in the US, especially vis-à-vis to its like-for-like growth.
“Our stores in the US performed very well and we have announced four further stores to open in the near future,” highlighted the chief executive of Primark. Though the announcement of new stores in the US has been publicized, they still do not feature in the ‘New store openings” section included in the company’s latest report, additionally, the chain hasn’t seen a new opening in the America sine 2018.
After its 2015 breach into the US market, the company’s achievements were transparent and apparent through its reports and points of sale. The Irish retailer added four more stores in 2016, just a year after its landing, ending the year with a total of 5 stores. The company ended its fiscal year on a high note with revenue of 5.949 million pounds (7.8 billion dollars), with a margin of up to 11%.
The evolution of Primark can be debatable in terms of its stagnation and slow growth for a company that only operates with physical stores amidst an era driven by digitalization and ecommerce. In 2017, The Irish fashion retailer continued its sluggish climb to the top, Primark opened 3 more stores in the US, after reinforcing its presence in North America the preceding year. Under the management of Paul Machant, CEO of Primark since 2009, the company had 8 stores opened in America and projected to open another in Brooklyn, New York, the following year.
Primark currently possesses 9 stores across America
After optimizing its store sales densities and fine-tuning its product ranges, the company trialed small store formats in 2018, which they described in the US as “working well”. That year Primark made good on its promises and opened a new store in Brooklyn, counting 9 points of sales in the US market. Primark ended the fiscal year of 2018 with a revenue of 7.5 billion pounds (9.76 billion dollars), with a profit margin of 11.3%, 0.9% more than the previous year.
The retailer headquartered in Dublin continues to pursue the American dream at a slow pace but with speaking digits in revenues. Primark did not open any additional store in 2019 in the US, was it perhaps a transformational year for the company. According to a publicized statement of the company, it plans to go big in 2020 with more openings. Primark currently has 9 operative stores in the US.