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Last Updated: Friday, 2 December 2005, 00:03 GMT
Primark - king of no-frills fashion
By Mallary Gelb
BBC Money Programme

In the fast moving world of fashion, 2005 has unquestionably been the year of the budget chain Primark.

Primark shopper
Can Primark continue to grow its market share?

With 123 shops in the UK and more on the way, it has become a leading player in the high street.

It scooped one of the major prizes at the High Street fashion awards this autumn, and its low-cost, high-fashion clothing has even appeared in the fashion bible Vogue.

These days, according to Grazia magazine's Paula Read, even fashion editors can be found comparing notes on Primark's latest offerings.

"I find fashion editors in Milan talking about, oh did you see what Primark had in Hammersmith last week, which is kind of extraordinary," she says.

One of the chain's biggest successes this year has been its military jacket.

To date, more than a quarter of a million have been sold in 12 different styles.

Ambitious expansion

The buzz around Primark has, inevitably, made it a favourite among financiers in the City of London.

People go into the top end of the High Street and think maybe I can get that from the bottom end of the High Street
Intellectual property lawyer Nicola Solomon

The latest company results, released in November, show annual profits up 30% and sales up 17% to more than 1b.

With plans for 47 new branches this year in the UK, on former Littlewoods and Allders sites, this is clearly just the first steps in Primark's strategy to become a dominant presence on the high street.

This Spring will also see Primark challenging the fashion chains Zara and Mango on their own turf when it opens two shops in Spain.

Tough market

Primark's success is all the more surprising because it comes at a time of retail gloom.

Several long-established names have shut up shop.

Primark store in Southampton
A low cost strategy is not a cheap strategy for a company to pursue

A recent upturn in fortunes for Marks and Spencer follows three years of turmoil, while BHS, Next and Matalan are increasingly finding themselves squeezed by the competition, by the slump in consumer confidence and by falling growth in clothing sales.

Maureen Hinton, senior retail analyst at the research organization Verdict says the economic climate is perfect for Primark.

"Consumers have more of a draw on their wallets because of rising interest rates, rising utility costs and the flattening of the housing market, but we still need to buy clothes and women want their fashion fix, so these no frills retailers are providing that service for them," she says.

"That's why they're drawing in more and more shoppers and why they're growing so fast."

Iconic fashion

But Primark's success is not simply down to supplying a fashion fix.

Primark store in Reading
Great sales does not make a brand fashionable, critics say

Primark thrives because of its speed at turning out designs inspired by the catwalk and red carpet.

It takes on average just six weeks for an item to go from concept stage into the shops, irrespective of whether it's a Kate Moss style waist coat or a Sienna Miller boho style skirt.

As for cost, the volume of turnover means the company can negotiate cheap prices from its manufactures in China and Eastern Europe and takes a smaller profit margin per item than some other high street stores.

"If Primark produces an iconic piece like the military jacket, they can do it as such low prices that everybody just zooms in on it," says Ms Hinton.

Customer respect

But some fashion industry veterans are concerned that the customer is being led astray.

George Davies, the man who kicked off the no-frills fashion industry in 1990 with George at Asda, before moving on to creating the Per Una range at Marks and Spencer, believes cheap does not necessarily mean good value.

Primark's bulk sales approach to fashion could ultimately backfire, he says.

"If I stood up and said I've sold a quarter of a million of those, that's not fashion, that's volume.

"To be a long term credible women's fashion brand you have to respect the individuality of your customer."

Bargain hunters

There's also concern within the industry about some of the company's practices.

The clothing chain Monsoon has twice taken legal action against Primark over alleged copying of designs.

Both cases were settled out of court, but intellectual property lawyer Nicola Solomon says allegations of copyright infringement are becoming rife across the industry.

"There is a culture now of seeing a designer thing and thinking I can get that cheaper," she says.

"Now, obviously that's always been done with the top designers, but now people go into the top end of the High Street and think maybe I can get that from the bottom end of the High Street."

With Christmas fast approaching, more and more shoppers will be looking for exactly those kinds of bargains.

That can only be good news for Primark.


The Money Programme - Primark - king of no-frills fashion - BBC TWO at 7pm on Friday 2 December.



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