While 2008 has witnessed the demise of a string of value retailers, Arthur Ryan’s unstoppable Primark chain has been the dominant force on the high street.
Current economic conditions have certainly played a role in the turmoil affecting the value sector, but the ‘Primark effect’ has arguably been the biggest factor in the downfall of Select, Internationale, Ethel Austin and MK One this year. Other value chains such as Peacocks and matalan. Matalan have changed their strategies to focus on fashion-led products in reaction to Ryan’s continued rise, but even the likes of supermarket chain Tesco have been forced to drive down prices to compete with Primark. It’s no wonder that Primark scooped the Value Retailer of the Year gong at this year’s Drapers Awards.
Even the middle market has been plagued by Primark’s success. On the same day that Marks & Spencer, the UK’s largest clothing retailer, recorded a slump of 34% in adjusted pre-tax profits for the 26 weeks to September 27, Ryan revealed that Primark’s profits had risen by 17% to 233 million for the year. It is a stark warning to M&S, with Primark snapping at its heels in the fight for market share.
Earlier this year, Primark inched closer to toppling M&S from the top spot in market share by volume, growing its share to 10.1% behind M&S’s 11.4%. This was followed by a BBC Panorama scandal, with allegations about the ethics of Primark’s supply chain. But this appears to have had little effect on Ryan’s shoppers’ love of his bargain fashions.
Driving massive volumes and taking less margin is what steers Primark’s growth, a strategy that has succeeded through Primark’s expansion of its retail selling space. Over the year, Ryan grew Primark’s square footage by 13% to 5.4 million sq ft.
Despite Primark’s strength and the never-ending column inches it receives, Ryan himself remains a bit of a mystery. He refuses to be interviewed and finding a photograph of him is the equivalent of striking gold.
“He’s a living legend,” says Jane McNally, chief executive of brand house Alexon Group, who began her career as a deputy controller at Primark. “Arthur is inspirational and has a refreshing way of looking at fashion. He is focused on gaining market share.”
Ryan’s wish to remain out of the limelight is not mirrored by his approach to running Primark internally. “When I worked at Primark, Arthur was very accessible and approachable,” McNally continues. “Because he is so focused on the job, his team is focused too. He has an amazing understanding of women’s fashion and an incredible attention to detail. I learnt a lot from him.”
Even to prospective employees, Ryan remains friendly and inspirational. One industry insider, who was interviewed by Ryan earlier in his career, says: “He was very natural when he interviewed me, with no airs and graces. I walked out of the interview thinking: ‘What a lovely fella’.”
Now in his early 70s, the question of when Ryan might retire or prepare a succession plan has been talked about for some years. Finally, this summer Ryan’s charm lured former New Look chief operating officer Paul Marchant to the same role.
It is understood Marchant, who joins the retailer next year, will be primed to take over from Ryan, but such is Ryan’s passion that he is not ready to step down anytime soon.
A source close to Primark told Drapers that Ryan told the Primark management team he would stay until 2011. Given the economic crisis and Primark’s proven track record, it is unlikely that Ryan’s team would mind. But the rest of the high street might.