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Primark founder Arthur Ryan opens up to Paul Marchant

Paul Marchant and Arthur Ryan

As part of Drapers’ 130th anniversary celebrations, we brought together some of fashion retail’s biggest names for a series of unique one-on-one interviews.

Primark CEO Paul Marchant discusses how the retailer went from a single Dublin store to a worldwide force with his predecessor, the retailer’s founder, Arthur Ryan.

Primark chairman Arthur Ryan launched the value retailer – known as Penneys in Ireland – in 1969 at 47 Mary Street, Dublin, where a store and the retailer’s now very modern head office remain to this day. Over the past 48 years, the notoriously media-shy Ryan has led the business from humble beginnings to a global force that now has more than 335 stores and 70,000 employees in 11 countries.

In 2009, Ryan appointed Paul Marchant to be his successor as CEO. Marchant, a product man through and through, cut his teeth as a buyer at Topman and River Island before moving to Debenhams, where he was the trading director of clothing. In 2005 he joined New Look as buying director, and was promoted to chief operating officer in 2008. The following January, Marchant joined Primark (owned by Associated British Foods) in the same role, before stepping into the CEO position in September 2009.

Over coffee in the Dublin headquarters, Ryan and Marchant discuss how Primark and the fashion industry have evolved over the past five decades.

Paul Marchant: So, Arthur, the business has been going now for 48 years. Tell me about how it all began.

Arthur Ryan: I met Garfield Weston [whose descendants are the controlling shareholders in Associated British Foods] on a Friday at 2pm, and I started working at 3pm. It was very challenging at the beginning. The positives were that we were in a capital city and we had the Weston backing, but we were in a secondary location and had to try to grow while we held on to the bit of trade we had. We needed to get people and a supplier base that trusted us.

PM: We’re sitting in the original store now [it was extended over the years to incorporate the adjoining 125,000 sq ft head office]. How big was the store when you joined?

Arthur Ryan

Photographer: Peter Rowan

Arthur Ryan

I saw a big opportunity in picking up grocery leases and rental prices, and selling clothing there

Arthur Ryan

AR: It was two floors and about a third of the size at around 35,000 sq ft. It was all glass windows at the front, and they were broken every weekend.

PM: What about the second store – where was that?

AR: It was in Phibsborough (north Dublin). We had a sister firm called Power Supermarkets.

PM: So it was putting clothing into supermarkets?

AR: Exactly. Power Supermarkets had good footfall and a few stores, so we ended up in the stores in Ballymun, Kilbarrack, Stillorgan and Dún Laoghaire [all in Dublin or County Dublin] and in Galway. To indicate how much it’s changed, the fitting room in the Oxford Street West [Marble Arch, London] store is the same size as the Phibsborough store was in those days. We worked here [in the Mary Street store] all day, then the deliveries would come in in the evening and we would allocate the goods to the branches; then at night we cleaned the stores, as we couldn’t afford cleaners.

PM: So the business started here in Ireland, and the next market was the UK – is that right? That was in 1973, wasn’t it?

The family have the mentality that we’re not just here for today. I was always reassured by them

Arthur Ryan

AR: That’s right. We went into Northern Ireland first and opened a few stores there. We had suppliers in Ireland and the UK, and in 1973 there was a border and, trying to get goods through it, you could be seven or eight hours in a queue full of trucks – which is exactly what the Irish and British prime ministers are trying to avoid with Brexit.

At that point we had a bit of volume, and a few suppliers believed in us. There was trend at the time for leaving the high street and moving into out-of-town locations where there were bigger units and better parking. I saw a big opportunity in picking up grocery leases and rental prices, and selling clothing there. Looking at location as if it were a watch, you wanted to be at five to or five past 12, so you were spot-on in terms of footfall. We had a cheaper grocery lease, and all our competitors had a textile lease and were paying big bucks. We were on our way then.

PM: In terms of the brand, Arthur, it is Penneys here in Ireland. Why is it Primark in the UK, and how did the name come about?

AR: When I joined, the name Penneys was already registered; Galen [Weston, co-founder of Penneys] had made the name up. It was fine until we sailed over the border and into turbulence. We had been in the UK about a week when we got a letter from JC Penney saying that we had breached its trademark.

PM: Did it go to court?

AR: We were [in court] in Scotland for two months. They came after us in Hong Kong, England, Scotland, Northern Ireland and Ireland – where we were trading and where our supplier base was. I’m now an amateur lawyer when it comes to trademarks! After a long process, I got talking to a guy on their side and his mother was from County Clare – hallelujah! When we left the hotel, we had a deal and all hostilities stopped.

It is easy to become carried away or deluded about success, but we would never do that

Paul Marchant

PM: A deal was struck, and Penneys carried on trading as Penneys in Ireland, but were we still trading with Penneys above the door in the UK?

AR: We were. At that point, we had a certain number of hours to take everything down. We were under pressure from the courts to strip the shops, strip the goods and get tickets to cover the labels.

PM: So you had to come up with a new brand name? How did you get to the name Primark?

AR: It was in this building, and we were all arguing, of course. We had a cafe that had a blackboard for the menu, so four of us went in and starting hashing it out [on that board]. I loved the name Prima – Latin for first, but the lawyer said we would have trouble trademarking it [in Italy], and I had learnt my lesson. We wanted to stay with the P, so we went through names and in the end we just picked it. It took about 33 minutes.

PM: So no need for a multimillion-pound marketing agency, then? A blackboard and 33 minutes – that’s great, isn’t it? Going back to the Westons – you worked for four of them across three different generations – what were they like? Moving from that family mentality into a big plc, how do you see that balance between family and the public-facing side?

AR: They are consistent. The family have the mentality that we’re not just here for today. I was always reassured by them. I didn’t have to look over my shoulder. I did what was right for the company, and I acted as if I owned it. The company always came first.

We wanted to stay with the P, so we went through names and in the end we just picked it. It took about 33 minutes

Arthur Ryan

PM: I think a lot of the principles you had when it was a small business, we are still living today. Driving footfall, cash flow generation, always doing the right thing and always thinking about the long term. How do you think we’ve maintained the same principles and behaviour as we’ve grown into a bigger business?

AR: You have to take a lot of the credit, Paul.

PM: That’s why I asked the question!

AR: When you came into the business, I was clear that I had one thing to do – to make you a success. I’d had my run, and it was great. I can say I’m successful, not in an arrogant way, but there has got to be change.

PM: Well, at first, Arthur, I wasn’t approached for the job, as the headhunters thought I had an exclusive deal with New Look – which I didn’t – so, when I got the call, I couldn’t wait to talk. If you remember, we met one morning at The Langham hotel [in London] at 7.30am, and spoke about buying and retail and football and family, and got on well. A few weeks later, we had the first of many nights out together. It was the start of a genuinely special friendship. After three months of meetings, lunches and dinners, we finally decided to consummate the marriage.

AR: What attracted you to Primark, Paul?

PM: This was a once-in-a-lifetime opportunity. You had been leading the business single-handedly since 1969, and you were going to move to the chairman position only once. It was the easiest decision in the world to come here. During the interview process, my gardening leave and the eight and a half years I’ve been here, it’s been clear that Primark is so powerful because we are seen as a big business by many, we are market leaders in many of the territories we trade in, but we see ourselves as a small business.

Some of the early conversations we had have stuck with me firmly. Two things you’ve told me are: first, always do the right thing for the long term and, second, always remember who we are. It is easy to become carried away or deluded about success, but we would never do that. That is thanks to you, Arthur, for having your feet firmly on the ground. Our close relationship and your support have been invaluable, and we wouldn’t be where we are today without it. Of course, the business has grown and evolved over the years, and half of what we do is now outside the UK and Ireland – did you ever imagine we would grow so much internationally?

It’s like a dance: you don’t just grab the first thing you see – you have to look around. Unless it’s 1.45am …

Arthur Ryan

AR: From the day I met the Westons, I wasn’t interested in running a local business. I said: ‘I will take it across to England,’ and then I saw an opportunity on the continent, and Spain was my first target. The Westons are very straight decision-makers and they are cautious; it took me eight years to convince them.

PM: So how did it go?

AR: We went to Spain [in 2006, opening in a shopping centre in Madrid], and it sank into the sand. Footfall was quiet, so I came up with an exit plan to throw the stock in the back of a van and go, but all of a sudden it started to fly, and we knew that the store was too small, if anything. We were offered a couple of others nearby, but I’m glad we passed it up and waited, as otherwise we wouldn’t have the magnificent new store we have there now [Primark opened its second-biggest store globally on the Gran Via in Madrid in October 2015].

Paul Marchant

Paul Marchant

PM: Some high street stores take years from conception to opening. You always talk about being patient and not just jumping into the first thing that comes up.

AR: It’s like a dance: you don’t just grab the first thing you see – you have to look around. Unless it’s 1.45am …

PM: (laughs) And you don’t want to go home alone!

AR: It was the same story in the UK. At the beginning, we were off the beaten track a bit. We could have been in London’s West End 10 years before we moved there, but we weren’t ready.

PM: It is amazing to think that, 12 years ago, our flagship London store was in Hammersmith. In 2007, we moved on to Oxford Street, and now we have the two stores bookending the street. One exciting thing for me about Primark is that we are still babies in many of the markets we are in, and there are still only 11 countries that we trade in.

AR: Only!

PM: But when you compare us with some of our competitors, we’re small. It’s a big world out there, and there are lots more opportunities and markets to go for. Arthur, what’s been your proudest moment so far, and what advice would you give to someone coming into the industry?

AR: My proudest moment so far is not being proud, and leading the people who give life to the business. My advice would be not to forget your roots and to keep your feet on the ground.

PM: It’s the same for me. You can’t get carried away by success. The world we live in and the industry are changing every day. We’ve seen many a high street brand disappear all over Europe – and, if you sit on your laurels, it’s the route to disaster. We always challenge ourselves to be the best we can be, as we’re afraid someone is going to come and steal our lunch. Once you believe you have delivered, it is all over. You have to push the boundaries all the time, and you can never be complacent or satisfied.

 

 

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