Jump to content
House Price Crash Forum
Sign in to follow this  
Sancho Panza

Primark Profits Surge 30% After ‘Magnificent Year’

Recommended Posts

Guardian 4/11/14

'Primark enjoyed a “magnificent year” with profits racing ahead by 30% as it expands its cheap fashion retail empire abroad.

The retailer’s relentless growth was not even dented by this autumn’s unseasonably warm weather, which has hurt high street rivals as shoppers delay buying jumpers, jackets and coats. Last week, Next, one of the UK’s most successful retailers, and SuperGroup were forced to issue profits warnings, as sales dipped in the warmth of a prolonged Indian summer. Sales at Primark were up 10% in the six weeks from mid-September, following the end of its financial year.

George Weston, chief executive of Primark’s parent company, Associated British Foods (ABF), said he was not concerned about the weather, adding that the retailer had not delayed or cancelled any orders.

Primark’s annual sales are close to £5bn, having risen 17% in the year ending 17 September, mostly as a result of the addition of 1.4m sq ft of shopping space by expanding abroad. Operating profits soared to £662m, a 30% rise. Excluding new stores, sales were up 4% on last year.

The retail chain opened its first stores in France last year, with three in the Paris suburbs as well as one in Marseille and another in Dijon.

The fashion retailer, which operates in nine countries, plans to open its first store in the US, with the first outlet, in central Boston, due to open at the end of 2015.


Retail analysts said Primark’s performance was especially impressive, as the retailer defies conventional wisdom by not offering online shopping, focusing instead on bricks-and-mortar stores.

“With no digital channels to speak of, strategically spread physical representation remains absolutely essential,” said Anusha Couttigane, senior consultant at Conlumino. She believes that changing perceptions have also helped.

“Shopping at Primark is no longer something to be whispered about,” she said. “Improved perceptions of its quality and fashionability have helped Primark to break through the fashion snobbery.”

But Emily Smith at marketing consultancy Added Value, suggested the brand had not shed its disposable fashion image. “Primark’s success has been fuelled by expansion. They have been successful with their offer of variety and inexpensive prices. But how long can this last? As people tire of disposable fashion and worry about the ethics of the manufacturing, the Primark offer becomes less appealing.”'

Share this post


Link to post
Share on other sites

Are their ethics any worse than anyone elses?

If I buy a NIKE t-shirt for £20 rather than a £3 Primark one is it a more "ethical" product?

What is the labour cost element of a t-shirt anyway? If it were made in the UK for someone on the living wage what would it cost?

Share this post


Link to post
Share on other sites

Are their ethics any worse than anyone elses?

If I buy a NIKE t-shirt for £20 rather than a £3 Primark one is it a more "ethical" product?

What is the labour cost element of a t-shirt anyway? If it were made in the UK for someone on the living wage what would it cost?

If there was a like button I'd press it for this.

Share this post


Link to post
Share on other sites

Share this post


Link to post
Share on other sites

What is the labour cost element of a t-shirt anyway? If it were made in the UK for someone on the living wage what would it cost?

I've seen estimates of total labour time for a shirt to be about 1 hour, with more complex items like cargo pants taking 2 hours or so.

Materials in the UK also tend to be more expensive, particularly if the fabric production had to be done here. Basic fabric costs in Asia for a T-shirt are about £2.

To a pay a living wage (and employers taxes) in the UK, I'd suggest adding £8 to the labour costs. If materials were made in the UK, I'd suggest adding another £2-3. Other processing, such as laundering, etc. would also be more expensive. Other overheads, such as rent, energy, H&S legislation, etc. would probably add another £1 per shirt.

Share this post


Link to post
Share on other sites

At one time the ethical argument probably had more justification. These days as the UK standard of living drops for those with lower incomes and it rises in other countries the question arises is it ethical for some retailers to charge maybe 10 times for a garment than the likes of Primark when the garments aren't that much different a lot of the time. Both types of shops with garments sourced from similar countries.

The same applies to the pound shops - almost identical items maybe 1/10th of the price.

The ethical argument becomes less and less relevant to rip-off Britain as time goes on.

Edited by billybong

Share this post


Link to post
Share on other sites

All part of the trend where "discounters" are doing very well and middle of the road stores are struggling. Clearly the sign of an economy that is doing very well - not! Ahh, if only brothels and opium dens could be legalised Osborne would get even more GDP growth and regeneration of the high street (they could put them next to the betting shops).

As for ethics unless it's made in the EU or is fairtrade there is little difference between a £1 cotton t-shirt and one costing £10, they might even roll off the same production line.

Edit:

So the forum has built-in thought police, Gide0n becomes Osborne, wonder about Bliar?

Edited by olde guto

Share this post


Link to post
Share on other sites

My experience of Primark mens products was that the quality and the fit was dire. I was told by mates the items were only meant to be washed a few times and binned. Ethics doesn't seem to matter to consumers. I know 3rd world charity workers and arch feminists who shop there.

Wasn't there someone who bought a t-shirt there that allegedly had text from a worker stitched into it?

Edited by Ash4781

Share this post


Link to post
Share on other sites

Last time I shopped in Primark was probably around ten years ago, jeans were good and t-shirts cheap and plentiful. Last time I tried to shop there was maybe two years ago and the clothes just looked nasty, poor fitting and cheap but not cheap actually really bl00dy expensive. I'll never step in there again.

Superdry has gone downhill too. Shirt looks good on the clothes hanger until you wash them a few times then lose shape, threads and generally fall apart. Woolly jumpers still excellent though.

Share this post


Link to post
Share on other sites

Last time I shopped in Primark was probably around ten years ago, jeans were good and t-shirts cheap and plentiful. Last time I tried to shop there was maybe two years ago and the clothes just looked nasty, poor fitting and cheap but not cheap actually really bl00dy expensive. I'll never step in there again.

Funnily enough, I looked in on the Tottenham Court Rd/Oxford St branch a couple of times a couple of years ago, and couldn't understand it, it seemed to be a complete hell hole, full of utter tat, admittedly not too expensive, and yet the crowds were baying for more, including lots of well dressed looking tourists.

But they've just opened a branch in Berlin, and I bought a few t shirts for €4 and they've survived a couple of washes.My only complaint is, there's just something about the colour shades, that seems to mark them out as being slightly inferior quality.

Given the hastle with luggage on planes these days, it's almost worth considering not taking any, and just buying some kit from Primark when you arrive.

TKMaxx is the shop that disappoints me these days. It seems to have become actually quite expensive (by my standards)

Edited by Steppenpig

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   219 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.