Primark to invade U.S. retail market

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Primark to invade U.S. retail market

Our American Junior Analyst, Bryan Devries, gives his perspective on Primark’s latest venture and takes a look at British brands that have enjoyed recent stateside success as well as those who have tried and failed.

Economic and social climates in both the United States and the United Kingdom have seen retail brands look across the pond for growth in recent years. Dublin-based Primark, a staple British brand that has already expanded over much of Europe, will look to establish a foothold in the U.S. retail market by opening a store in Boston by the end of next year. The cultural similarities between the United States Northeast and Europe along with the heavy Irish ties and large student population of Boston make this Massachusetts city an ideal location for the first Primark store in North America.

While Primark looks to capitalize on their formula that has already been successful throughout Europe; offering trendy clothes at an unbelievably low price, they are not afraid to adapt merchandise, pricing and store environment as they are well aware that the Bostonians reception of the Primark Brand will be heavily indicative of the retailers future success in the rest of the country.

Primark entering the United States retail market gives an interesting opportunity to look at other British retailers that have attempted to enter the U.S. retail market and their varying degrees of success. Prior to 2006, Burberry was growing at 2% a year and revenue was well less than a tenth of competitor Louis Vuitton. Since, they have been able to transform from an iconic but jaded British brand into a global symbol of luxury. While they already had stores in the U.S., this transformation was largely due to the retailer’s ability to globalize and establish itself and its outerwear as a staple of the United States elite. In 2009 Burberry opened its American headquarters on Madison Avenue and since has continued to globalize by focusing on growth in the Asia-Pacific region of the world.

Entering the US retail market only in 2009, Topshop has already been considered by many as a success in the states. They first opened a store in New York and in an effort to keep risk low and signed a deal last year agreeing to have some of their products sold in the high-end stores of US retailer Nordstrom Inc.

On the other hand, supermarket giant Tesco were forced to give up on the U.S. market last year as competition proved too difficult, the product they offered too ubiquitous and their marketing strategies too indistinctive.

Potentially the most important indicator of retailer success in expanding to the States has been the marketing and use of British culture. The marketing strategies of retailers that have experienced success like Topshop, Burberry, Ted Baker, Asos, Boden, and Jack Wills differs vastly from retailers like Tesco, Sainsbury, and Mark & Spencer that have unsuccessfully attempted to enter the U.S. market. Jack Wills slogan is ‘Fabulously British’ and they have recently opened a store in New Haven, the home of Yale, an Ivy League university whose architecture distinctly resembles that of Oxford University. The students at Yale, a school known for its academics, secret societies, preppy clothing and squash, hockey, lacrosse and crew programs, is exactly the type of clientele a store like Jack Wills and other British brands are trying to associate themselves with.

American consumers have a love and fascination for their Downton Abbey-esque, chocolate box version of British culture. In recent years, if an authentic British retailer has been able to persuade Americans that such a ‘proper’ lifestyle is possible through the purchase of a cable knit sweater and a nice pair of trousers, then Americans have been eager to fall head over heels and turn brands like Jack Wills, Boden, and Ted Baker into serious competition for classic American brands such as J. Crew and Gap. A Brooks Brothers blazer will always be a classic but in a culture that increasingly glorifies idiosyncratic styles, a Ted Baker sportcoat may be the ‘cooler’ option for the modern American male.

There is tremendous upside for Primark opening their first store in the United Sates but it is crucial they look at retailers that have both succeeded and failed in expanding to the states. Primark is not interested in being an American fad for a few years, and why should they, their interest lies in expanding to the U.S. and growing a large, sustainable customer base. To do this they must be willing to adapt and do their research in a way that successfully creates and fills a niche in the American retail market.

Bryan DeVries, Junior Analyst


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