Primark has a unique proposition with its key price advantage and large flagship stores. It follows in the footsteps of other fashion retailers that have already proved there is now a market for international fashion in the US, such as H&M, TopShop and Zara. Thanks to the internet, social media, and the rapid sharing of trends in the digital world, young fashion has become universal, and young American consumers are less conservative in their fashion tastes than in the past. Primark will be opening in cities that have already proved there is a market for international young fashion, such as Boston. Not having a transactional website limits the scope of its sales, but its core young customers like to shop at stores, and there is no point in going online until it solves the problem of selling such low priced products profitably. Primark also has plenty of opportunities to expand through new stores and markets in the meantime. Maureen Hinton is retail analyst at Conlumino.
No one can detract from the immunity to economic downturns that Primark has demonstrated over the past few years, and its recent results are certainly encouraging. But while the clothing firm may have succeeded in its European expansion, history shows how difficult it is to crack the US market. The experience of Tesco can testify to that. Sure, the merchandise Primark offers is cheap, but the controversy over its reliance on cheap labour will not necessarily sit well with some. Starting out with a 70,000 square foot store in Boston is one thing, but competing with larger rivals like H&M and Zara owner Inditex, without providing an option to purchase goods online, may turn out to be Primark’s downfall. The growth in online sales and the demand for this option is well documented, and is reflected in the Asos share price. Established US discount stores such as Target and Walmart will also be vying for the footfall. Brenda Kelly is chief market strategist at IG.