Unlike other clothing retailers, Primark still does not sell its products online.
Irish fashion retailer Primark is betting on the development of physical stores against the backdrop of a general trend to reduce space and move towards online retail among its closest competitors. As part of the updated strategy for the development of clothing discounters, it is planned to open more stores, as well as an overall increase in the area of department stores. Thus, the company expects to increase sales in a difficult market situation.
Associated British Foods, which owns the brand, expects US and European Primark stores to promote sales throughout the year. This strategy seems odd compared to what other retailers are doing, and market participants aren't sure it can work. On the back of recent reports, Primark's shares fell 3% despite gains in recent months.
Unlike other clothing retailers, Primark, one of the fast fashion influencers, still does not sell its products online. At the same time, more fashion brands are increasing online sales, leaving behind empty shelves in retail stores. Primark promises to add over 90,000 sqm of retail space in 2020. The start of a new wave of development of the retail network is given by the opening of the flagship store in Birmingham, UK.
“We are the people who invest in the main shopping streets and in the UK in general. These principles set Primark apart from its major competitors,” commented ABF CFO John Bason.
The company expects that by the end of 2019 sales will increase by 4%, although in comparison with comparable stores (excluding new openings), the decrease could be about 2%. Recently, even giants such as Zara and H&M have faced negative sales dynamics. However, the company remains optimistic, noting that Primark remains the best a discounter in its class that has the potential for huge growth and increased market share.