Primark was first established in 1969 in Ireland as Penneys, and is currently operating a total of 154 stores in the UK, Spain and Ireland. Primark has become a leading player in the UK fashion industry, showing huge growth while other players were finding it hard to maintain their income stream, with some even closing the doors of some unprofitable stores. The latest company results showed a increase of 30% in annual profits, with sales 17% up reaching the 1 billion. With great successes with some of its fashions such as its rage of military jackets, with more than 250 thousand sales up to date.
With the UK fashion market becoming stagnant and consumers having less money to spend due to increasing interest rates, high house prizes and rising utility cost. Primark is offering high fashion and low prices to bargain hunting consumers. Yet Primark does not only provide consumers with low cost fashion, it has developed the ability to quickly turning out designs inspired by the catwalk and red carpet. Giving its consumers access to generic fashions developed from high label brands.
This strategy seem
This strategy seems to not only be paying of in the UK, but also in Spain and Ireland. Primark opened its second shop in Spain on the 20th of September, and planning to open an additional 15 stores by the March 2007, expanding its business internationally. Currently they are employing over 18,400 people, which will increase to over 24000 by end of 2007.
Analyses and Evaluation
In order to analyse and evaluate Primark's position within the fashion market, we need to look at internal and external factors influencing its operations. Maybe the most basic, but effective tool that can be used is the SWOT analyses. This will give us a very good indication of Primark's current success as a fashion retailer. The strength and weakness part of the model look at the internal factors of an organization, and the opportunities and threats analyse the external factors that effects the companies ability to function successfully within a market.
From the Primark website it is possible to derive some of its strengths such as:
Full range of high quality, low priced fashion merchandise
Generic fashion products reflecting high fashion world trends
Established customer base
Localised recruiting practices within international organisation
Computerised Custom Clearance System
Dedicated warehouse and distribution service
From the above derived from Primarks website it is possible to see why this organization have the ability to undercut its competitors in the UK fashion industry. By manufacturing their merchandise in countries such as China and India with low labour costs, and then importing the goods via a very effective custom clearance system, and distributing it via a very efficient distribution system, gives them the ability to price their competitors out of the market. With a six week period from design to shop, they have the ability