Primark, the Dublin-headquartered retailer that trades in Ireland as Penneys, will open its first store in the United States this Thursday.
The retailer, which currently operates more than 285 stores across continental Europe, the United Kingdom and Ireland, is opening a four-floor store covering 70,000sq ft in the heart of Boston’s Downtown Crossing.
It will then open a huge outlet at the King of Prussia Mall on the outskirts of Philadelphia, which is the biggest shopping centre on the east coast of the US, with plans to open seven further stores across the US in the next two years.
While the US retail apparel market is variously described as oversupplied and über-competitive, Primark’s history of overseas development in what are highly competitive and well-developed fashion markets suggests that it strategises entry to new markets very well, according to Davy Stockbrokers.
Although the challenges should not be understated, Davy said Primark’s history of overseas development suggests that it can build market share in the US with operational discipline and profitable execution. “In the northeast US region, where Primark will be concentrated, we estimate that there is a potential addressable market of over 20 million customers,” Davy said.
The stockbroking firm commissioned US retail consultant Robin Lewis Inc to review Primark’s prospective US launch.
He said brand and price positioning will be critical, as will good execution on product and in-store environment.
Primark’s rapid expansion over the last year has boosted total sales by 15 per cent to £2.5 billion for the six months to the end of February this year. As a result, Primark’s share of ABF group profits has increased from 30-40 per cent to close to 70 per cent in the last fiscal year, and this could extend to a 75 per cent share based on Davy’s 2017 forecasts.
