Irish fast-fashion chain Primark sells cheap, trendy clothes and accessories—and its recent entrance into the American market could spell disaster for U.S. retailers.
Based in Dublin and owned by Associated British Foods (ABF), Primark opened its first U.S. locations in Boston and Philadelphia last year, selling the same stylish stuff as its European stores but for prices American customers were more used to seeing on less hip apparel sold at the likes of Walmart.
ABF chief George Weston has said several times since then that he’s pleased with the footfall, sales and customer feedback at the U.S. stores—and a Morgan Stanley pricing survey published Monday has confirmed why the retailer is resonating.
According to analysts, the average U.S. retailer is more than three times as expensive as Primark, with prices ranging from nearly 40 percent more at Walmart to as much as 400 percent more at Express. Even Forever 21’s prices are double.
“Primark’s low price points could act as a disruptive force in U.S. retail, in our view,” MarketWatch reported the bank analysts as writing.
Considering six more stores are slated to open in the U.S. this calendar year, including one at Connecticut’s Danbury Fair Mall this month, an already-struggling chain such as Old Navy (which recently announced it would close its 53 Japanese stores so it could focus on North America) could be fighting a losing battle. Forever 21 and Aeropostale are in the same boat.
“We think Primark’s similar offering but at even sharper price points could win over shoppers, particularly value-focused Millennials,” analysts wrote.