Primark Plans Store Expansion

Discount family clothing retailer Primark is sticking to its plans to expand its number of stores while most competition focuses on strengthening e-commerce sales.

Associated British Foods (ABF), the parent company, said that it expects Primark to deliver improved margin and profit and plans to increase its store count from 398 to 530 in the next five years. That would be an increase of +33% with much of the expansion planned for the U.S.

It is an interesting fact that while ABF expects to upgrade the internet site by showing more products that Primark sells, it will not make the site transactional. That means the company, unlike its competitors, will rely on its physical stores and not look for internet sales since management feels it is selling merchandise at rock bottom prices. Last year, the company lost $2.7 billion because its stores were locked due to the coronavirus. The company is expecting a quick recovery of sales because of its very attractive pricing policy.

In the expansion plans, the chain hopes to have 60 stores in the U.S., up from to 13 now in operation. Primark is currently selling in 14 countries and has 71,000 employees. The company has nine warehouses covering 7.1 million square feet. In September 2021, Primark unveiled a new Primark Cares sustainability strategy aimed at minimizing fashion waste, and reducing the company’s impact on the planet.

Licensed products such as Disney, Netflix NFLX , and Warner Brothers have been introduced into the Primark assortment in recent years. Since 2013, licensed offerings have grown strongly in areas such as music, film, TV, gaming, and toys. It makes Primark a destination store for licensed products.

In fiscal 2021, which ended September 18, 2021, the company opened 4 stores in the United States. (Sawgrass Mills in Florida, American Dream Mall in New Jersey, State Street in Chicago, and in the Fashion District in Philadelphia.) It also opened a store in the Czech Republic, France, the Netherlands, Poland, and United Kingdom. It opened two stores in Italy and four stores in Spain. The company is headquartered in London.

POSTSCRIPT: Primark is an international fashion retailer that offers great values to customers. Whether it is in Düsseldorf, Germany or Philadelphia, Pa., young customers roam the store and come down escalators with heaps of merchandise. The merchandise is of good quality yet cheap. The announced expansion in the United States should renew the momentum of sales and profits.

That said, I disagree with the company that value alone will drive customers to the stores to makes purchases rather than open their computer or a mobile device to shop remotely from home. Certainly, a harried mother would like to make purchases when her house is quiet. Time will tell.