Fashion Chain Primark Puts Click-And-Collect on Radar as Expansion Gathers Pace

Customers walks with shopping bags, as retail store Primark in Birmingham, Britain reopens its doors after a third lockdown imposed in early January due to the ongoing coronavirus disease (COVID-19) pandemic, April 12, 2021. REUTERS/Carl Recine
Customers walks with shopping bags, as retail store Primark in Birmingham, Britain reopens its doors after a third lockdown imposed in early January due to the ongoing coronavirus disease (COVID-19) pandemic, April 12, 2021. REUTERS/Carl Recine
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Fashion Chain Primark Puts Click-And-Collect on Radar as Expansion Gathers Pace

Customers walks with shopping bags, as retail store Primark in Birmingham, Britain reopens its doors after a third lockdown imposed in early January due to the ongoing coronavirus disease (COVID-19) pandemic, April 12, 2021. REUTERS/Carl Recine
Customers walks with shopping bags, as retail store Primark in Birmingham, Britain reopens its doors after a third lockdown imposed in early January due to the ongoing coronavirus disease (COVID-19) pandemic, April 12, 2021. REUTERS/Carl Recine

Budget fashion chain Primark, which has shunned the extra cost of home delivery, could add click-and-collect services to its revamped website over time, but still sees new stores in markets such as Italy and the United States as it main growth driver.

The chain, whose trendy clothes at rock-bottom prices have taken British and European shoppers by storm over the last decade, will launch a new website in the United Kingdom by the end of March, and across its 13 other markets by the autumn.

That will better showcase its 10,000 products, provide customers with near real-time information on product availability by store and enable Primark to mine the data of its over 24 million active "engagers".

"We’re making the digital move forward in a very big way in both the UK and the rest of Europe. That will generate sales and profits for us," John Bason, finance director of Primark's owner, Associated British Foods (ABF.L), told Reuters.

"Does this give us a capability to move further forward? Well let’s have a look at that," he said in an interview.

"If there was an e-commerce opportunity for us, it will probably be more in the area of click-and-collect," he said, referring to products ordered online and picked up in store.

But Bason said home delivery remained off Primark's agenda as the economics don't stack-up for its low price points.

"You can’t get our value by delivery to home, it’s as simple as that," said the 23-year veteran of AB Foods, which also owns major sugar, grocery, ingredients and agricultural businesses.

Founded by the late Arthur Ryan in Dublin in 1969 under the Penneys brand, Primark trades from 402 stores. It turned over 7.8 billion pounds ($10.2 billion) before the COVID-19 pandemic, which hit it hard as its stores were forced to close.

In November, AB Foods targeted an expansion of Primark to 530 stores over the next five years, accelerating growth in the major markets of the United States, France, Italy and Iberia. read more

But 530 is "not the end of the line," said Bason. "There’s a long way to go with this business in terms of adding space.”

Primark is confident its model can succeed in a US market that has been a graveyard for some of Britain's biggest retailers, including Marks & Spencer, Tesco and Philip Green's Topshop.

Bason said the five-year plan would take it from 13 US stores to about 60 - all to the east of the Mississippi River.

That still leave vast swathes of the United States unserved by Primark, including key states such as California.

“Without me being sort of categoric, you can see how you’d move into other geographies," said Bason. “There is huge potential in the United States, there really is."

He also believes Italy provides a "massive runway," noting Primark recently opened its first store in Sicily, a market that has more people than the island of Ireland - Primark's longest standing market. Primark currently has eight stores in Italy.

"In Spain and Iberia we have 65 stores. There’s no reason why Italy shouldn’t be that scale and go beyond that," Bason said.

Primark has also dipped its toe into central and eastern Europe, opening stores in Poland, the Czech Republic and Slovenia. A first store in Romania is slated for 2022.

Bason said its plans for this region had not been altered by Russia's invasion of Ukraine.



Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
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Adidas Holds Back on Profit Upgrade Due to Tariff Uncertainty 

The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)
The logo of Adidas is seen on a Gazelle sneaker for sale at a shop in Berlin, Germany, May 2, 2024. (Reuters)

German sportswear maker Adidas on Tuesday said higher US import tariffs and broader uncertainty around trade were clouding its forecasts and making it difficult to plan.

CEO Bjorn Gulden said the company would have hiked its revenue and profit guidance for 2025 after strong first-quarter results, but tariff uncertainty meant it decided to hold back.

Adidas expects the blanket increase in US tariffs to eventually cause price increases across all its products, but said it was currently impossible to quantify those or to establish the likely impact on US consumer demand, highlighting the paralysis caused by trade uncertainty.

Adidas has already reduced exports of China-made goods to the US to a minimum but is still "somewhat exposed" to much higher US tariffs on Chinese goods, Gulden said, though it is unclear how long those might remain at the current level.

"Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any 'final' decisions on what to do," Gulden said.

Unexpectedly high US tariffs on Southeast Asian countries such as Vietnam and Indonesia, announced at the start of this month, but paused until July, blindsided sportswear brands, which make most of their sneakers and clothing there.

As tariffs raise the cost of doing business, Adidas said it would strive to ensure US retail partners and consumers get product "at the best possible price", adding it would try to compensate for uncertainty in the US by boosting its performance in the rest of the world.

First-quarter sales rose 14% in Europe and 13% in Greater China and were up 26% in Latin America. Sales in North America increased just 3%, which Adidas said was due to the phase-out of its Yeezy sneaker line.

While sticking to its full-year guidance, Adidas said uncertainties "could put negative pressure on this later in the year".