Primark: High-end clothes at Low-end costs!
A business news article on The Independent, 28 November 2014, with the headline “British Fashion goes where food failed in America”, by Laura Chesters, caught my eye for two reasons: one, for me having a foot on either side of the Atlantic, and two, for being an online fashion brand logo & web designer, web consultant and web analyst.
Food for thought:
We all know that some of the most reputed UK food brands and fashion retailers failed in the US for known and unknown reasons, and we also know that the States, along with the other consumer-based countries, is yet to come out of the global financial crunch.
So, I decided to find out who this dare-devil brand was and what made this Brand think they could do better than the best that had failed miserably, like Juicy Couture who were planning to close down all their shops.
Let’s see what this brand has got for us in terms of Brand Pushing.
The Brand in question is Primark, an Irish clothing brand, opened its first store in Dublin, Ireland in 1969, that operates in several countries in Europe, including UK, owned by Association British Foods (ABF), a commercial giant having four other divisions: sugar, agriculture, grocery and ingredients.
There are mixed feelings, opinions, critiques and analyses about this fashion brand from different sections of the society: customers, arm-chair critics, journalists, marketing experts, etc. Some optimists say, as the Primark brand has created ‘Primani’ (or ‘Primarni’) & ‘Pradamark’ Effect in the global retail market sector, it can ride over the American market waves very easily; whereas, some pessimists say it is not so easy to wade through the turbulent American market waters as the US market is already over-crowded and the American psych is entirely different from that of the European.
(Primani – Primark and the high-end luxury Italian fashion designer ‘Girogio Armani’ or, if you want to consider the other one, ‘Primarni’ – Primark and the Italian high-end fashion label ‘Marni’, founded by designer Consuelo Castiglioni & Pradamark – another high-end luxury Italian fashion Brand ‘Prada’ and ‘Primark’, to jokingly show that Primark is a low-end brand but with a high-end reputation!)
Primark has several sub-brands: Atmosphere, Earlydays, Rebel, Young Dimension, Love to Lounge, Cedar Wood State, Ocean Club, Opia, No Secret, Denim Co., and Secret Possessions, which keep the mother ship, Primark, floating smoothly.
Primark now operates in 292 shops in about 8 countries in Europe, with about 51, 250 employees. It has been the flagship of ABF.
J C Penny Connection:
When Primark, which was originally called ‘Pennys’, after the founder James Cash Penny, (and is still called so) in Dublin, Ireland, its place of origin, entered the UK, it had to change its name in order to keep off legal clashes with the already established JC Penny, an American clothes brand originated in Plano in the state of Texas in the USA. The same Primark is going to invade the USA market and is going to give JC Penny and other low-end retailers a tough time.
1. In the media, Primark is called a: budget clothing retailer; cheap-range clothing; cheap chic product; discount fashion chain; discount clothing retailer; budget fashion line; one pound fifty; with bargain-basement prices; value-for-money fashion items; cheap throw-away fashions, the shop that nobody admitted going to, jumble sale, bargain shop, cheap imitations of cat-walk trends, lack durability, cut-price fashion, and so on.
In an article on an online shoping.blogspot.in website, the author suggested that as there was no online shopping for Primark, customers were to look for those Primark apparel on eBay, Asos or even “second hand” online shops. In an article on London Town, an online site for London, the author wrote: (at Primark shops) rummaging, ransacking and ruthless nabbing are the norm.
2. Kyrie Chamberlin, Mercurylab (blog) staff wrote in his October 09, 2014 article under the title ‘The Primark Experience’ that Primark brand had nothing to do with quality and that it was good news that “nobody knew the item you bought was from Primark”. Everyone was returning many item at Primark; customers were hot, angry and impatient because customer service was poor and understaffed.
3. No online shop of its own – customers should find Primark items on online shopping stores (e-commerce companies) where brands exhibit their wares and customers buy them online.
4. Not only the clothing line but also the other fashion items, like, for example, ‘make-up kits’ have received some negative remarks. experts at FEMAIL, an online female magazine, investigated and found out that ladies liked the expensive brands, like Tom Ford make-up, because subjects complained that Primark’s ‘PS Love’ at £ 2 a piece, product didn’t last well and had flaked off soon.
5. Primark was accused of stealing high profile luxury brand designs and when sued, settling the dispute out of court, and it also faced criticism and charges of sexually exploiting children over making ‘padded’ bikinis for 7 year-olds. (which lines Primark withdrew hastily.)
6. According to Greenpeace investigations, Primark, along with the likes of Burbery, was accused of using harmful and banned chemicals in their clothes lines, which Primark denied but assured it would check on the issue.
7. The most disturbing is that Primark has faced a lot of ethical violations and gotten into several scams as it gets its clothing lines sewn by under-paid & under-aged illegal immigrants in UK sweatshops, especially the one in 2009 in Knitwear Ltd, Manchester, and in sweatshops around the world, especially in the Indian sub-continent, where children as young as 11 are forced to work for more than 10 hours a day in horrible working conditions with very little pay. (Which experts say is the reason behind Primark’s ability to sell its clothes very cheaply.)
8. A marketing expert compared Primark retail chain with a fast food chain, meaning that it is a clothes line you go to when you want to make a quick and easy shopping.
1. On the other hand, in the same media, Primark is called a: purse-friendly fashion, amazing fashion at amazing prices, Britain’s biggest mass-market fashion retailer, more successful than its rivals Zara, Peacocks, Marks & Spencer, Next (keeping Primark in par with the other reputed fashion brands), fast growing fashion chain, clothes that look expensive and be exactly on-trend, chic as well as cheap, Mecca for celebrity shoppers, a student favorite, shopping beacon on the high street, a high-street value store, fast and disposable, and so on.
Jim Collins on Save The Students website wrote in his humorous article titled ’13 things everyone needs to know before shopping at Primarks’ that Primark is the queen of respectable bargain shopping on the high street. In an article on London Town, an online site for London, the author wrote: (Primax is) a favorite with those customers who are keen to keep up with the latest looks but evidently less keen on paying high prices for items set to fall out of fashion in a week or so…
In her article for Mailonline, November 2014, Bianca London, wrote that analysts were “hailing” Primark as a ‘retailing powerhouse’ that had perfected the art of mixing low prices with high fashion… shopping there (Primark) “no longer something to be whispered about”… but they (customers at Primark) will never, ever leave empty-handed. And they will come back again very soon to do the same again.
2. The same Kyrie Chamberlin, MercuryLab (blog) staff, who accused Primark of not having quality, confessed in the same article that he would go back to Primark again because Primark was so inexpensive, well-stocked, and, in addition, admitted that it was like addiction buying Primark.
3. Primark is making arrangements to bring out an online stores soon.
4. Primark assured the public and the media openly that their clothes had no chemicals and that stringent steps were taken to avoid any harmful or banned chemicals at any cost.
5. Dan McDougall, in his article for The Observer, India, wrote in his article, June 22, 2008, regarding the ethical violations that Primark acted in such a positive way and so quickly that its standing in the high street remained secure and its reputation repaired before many of its customers would notice it had been tarnished.
6. Being the member of ETI (Ethical Trade Initiative), an alliance of companies, trade unions and NGOs working in collaboration to improve the working conditions of people all over the world, Primark audits suppliers to ensure standards set out by ETI and extends its cooperation where necessary, making its Ethical Trade processes transparent.
7. Setting up of “Primark Better Lives Foundation” to provide financial assistance to organisations that help improve the lives of young people who have been subjected to exploitation.
8. Primark responded immediately to the tragedy of Rana Plaza building, the building where thousands of workers sewed clothes for the reputed European and American brands, which collapsed killing thousands of workers, in Bangladesh in 2013, by agreeing to pay $ 10m and sending initial amount of $ 2m as short term support. Later, formed partnership with Nari Uddug Kendra (NUK — Women’s Job/employment Centre), an organisation supporting women’s rights and health in Bangladesh, to see to that the female workers in its supplying units get better pay and working conditions, and this gesture won Primark several accolades from international organisations.
9. Recently, Vogue, the fashion ‘bible’ magazine, gave a Primark jacket high-end credibility, which shows that cheapness has a value, too.
10. At Primark, customers are given only paper bags to support the ‘going green’ theme, which act gets the sympathy from the environmentalists as well.
The 662m Pound Sterling Question:
How can Primark sell clothes that cheap?
This has been the question everybody is asking but nobody has got an answer. With sales almost touching £ 5 billion resulting in the net annual profit of £662m in 2014, Primark is certainly ruling the mediocre fashion market.
So, it has been a mystery how this clothing brand is selling so cheaply and making so huge profits. According to some whistle blowers, Primark uses cheap cloth and steals designs from other brands, and, above all, gets its items made in poor countries where refugees in camps are made to work and where child labor rules are violated with impunity. They also accuse Primark for mixing up quality products with cheap products with the same price tags or different price tags so that the customers in their shopping frenzy buy either or both!
However, according to the sources at Primark, there are a couple simple honest answers:1. Careful attention to the stores; awareness of the competitors and willingness to undercut the products.
2. Keeping the overheads low to pass the cost savings back to the customers.
3. Not spending millions on ‘extensive & expensive advertising’; instead, concentrating more on the quality and stock.
4. Placing orders in bulk well in advance so that suppliers do not charge extra or heavily for supplying last minute orders on the pretext of paying extra to their workers, and in most cases, suppliers have enough time to finish the orders and send the goods by economy freight.
Having enjoyed great success in the UK and the Continent, Primark is all set to enter the American fashion market in 2015, and there have been several speculations as to how it is going to fare in the ever-fickle market where some of the other UK brands have failed, if not miserably, notably Marks & Spencer, WH Smith, Sainsbury’s and Tesco.
Its flagship outlet will be a 70,000 square-foot space in downtown Boston’s Burnham Building, the former home of the famous Filene’s department store. And there are plans to open eight stores in Northeast by the middle of 2016.
This really set the analysts’ minds working hard on what to say.
(+) Walter Loeb, wrote in his May 2014 article A Race to the Bottom Led by Primark and Alibaba, for Forbes that “as Primark is a well financed company, it can take its time to pursue a savvy expansion into the United States”.
(+) Another expert opined that Primark’s combination of fast fashion and decent quality will be unique in the US market and so will be successful.
(-/+) Jennifer Rankin, in her article for The Guardian, April 2014, referred to Maureen Hinton, a retail analyst at Conlumino, a retail research agency and consulting firm, who predicted that Primark was highly likely to succeed in the States.
(-) One writer opined that as there are the likes of JC Pennys and Target at the cheap end, it may be a tough fight for Primark to rule the roost.
I personally feel that by the looks of the strong Brand strategy Primark has adopted, it is going to be a success.
I would very much like to know what your analysis would be!