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Collaborations key to Primark's success

Primark has boosted footfall in stores through its social media and influencer collaborations, finance director at owner Associated British Foods John Bason has told Drapers.

“One of the main areas where Primark has got stronger is driving our footfall through social media,” said Bason. “On Instagram we’re up to nearly 7 million followers, which allows for targeted marketing.

“A number of our collaborations have worked very well, including with [influencer] Alice Liveing, and we are working on future collections with others for this year. There will definitely be celebrity collaborations planned for the opening in Birmingham.”

Primark will open its largest store to date, a 160,000 sq ft unit in Birmingham, in April.

Overall sales at the retailer are expected to be 4% ahead for the 24 weeks to 2 March 2019, despite a weak November performance. Profits for the period are expected to be “well ahead” of the same time the previous year.

The growth has been driven by new store openings and increased margins.

“Our increased margins have been caused by three things,” explained Bason. “A benefit on exchange rates because of the weaker dollar, more reactive planning in our buying volumes and the quality of product – the Primark buyers are at the top of their game.”

Sales in Europe for the half year are expected to be up 5% on 2017/18 as a result of sales growth in Spain, France, Italy and Belgium. However, like-for-like sales in the region are expected to decline by 3% as the retailer said trade in Germany continues to be difficult.

It will reduce the size of some German stores to help reduce costs, as well as strengthening management and focusing on marketing.

The retailer “has much reduced the US operating loss”, and has plans to increase its store portfolio across the US at a “careful and considered” pace, Bason told Drapers: “We want to build up store sizes in the US, but it’s about careful site selection. Space is so abundant in the US, so it’s about a considered approach to the right locations and the right-sized stores.”

New York, Philadelphia and Washington are all likely next locations for Primark stores.

 

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