The Irish retailer is considered a major threat to the supremacy of H&M and Zara, writes DEREK SCALLYin Berlin
DISPOSABLE FASHION Irish- style is coming to Germany as Penneys goes into battle with established players HM and Zara.
Thousands of customers stormed the first German store, trading under the Primark brand, in the northern port city of Bremen during the summer. Now the retailer is hoping lightning strikes twice when it opens its second store in Frankfurt this month.
“We’re looking forward to the upcoming opening and are still impressed with how well our concept was received in Bremen,” Primark head of marketing Breege O’Donoghue told German trade magazine Textilwirtschaft.
The arrival of Primark in Germany has intrigued the industry and business press alike, not just because of its track record in Britain and Ireland, but because its no-frills approach to retailing has a familiar ring.
“Germans love discounters and they like stores with large floorspace; Primark offers both,” retail analyst Joachim Stumpf told the Frankfurter Allgemeine newspaper.
Similarly optimistic is consultant Harald Münzberg,who said: “Perhaps Primark can even become the Aldi of the fashion sector.”
While German discounters have taught the world a thing or two about food retailing, German high-street fashion has been dominated for years by foreign chains. Leading the pack is Sweden’s HM; Spain’s Zara is a big player, too, as is Sweden’s less glamorous but solid CA.
The Irish upstart hopes its concept will give customers the best of all worlds: the bleeding- edge fashion of HM and Zara with the bargain-basement price of CA. German business magazine Capital has already dubbed the Irish company a “pan-European threat” to the Swedish fashion supremacy.
HM, in particular, is starting to look like a victim of its own extraordinary success in Germany, with designer collections by Karl Lagerfeld and Jimmy Choo unable to disguise slipping turnover and fewer store openings.
CA knows Primark well: after it failed to crack the British market, it sold many of its stores there to the Irish outfit.
Primark has said it will need to open at least four or five branches to get a feel for the German market, which varies wildly from poorer, low-fashion cities like Berlin and Leipzig to the well- heeled, well-groomed cities of Hamburg and Munich.
The plan is to follow its British concept of top inner-city locations with stores of more than 3,000sq m. To that end, Primark has timed its arrival nicely, just as struggling department store chain Karstadt gets ready to offload many of its prime properties.
Currently with 191 stores across Europe, Primark says its German expansion is part of a wider European campaign, with further openings due in Britain, Spain, Portugal, Belgium and the Netherlands.
It’s not the only new player in town: Next has made a low-key entry into the German market, with a test store in Dresden.
Next and Primark know that making it big in Europe’s biggest retail market is far from a given. A who’s who of experienced players with deep pockets have come and gone sporting more than a bloody nose: Walmart, Gap and Marks Spencer are just three of the companies that have been unable to get a handle on what German customers want.
For the winners, the rewards are great: research company GfK values the German textile market at €39 billion. Of that, €6.2 billion is in the “young fashion” segment and another €2.2 billion is earned in discount fashion.
At this end of the market, Primark faces an established German rival, Tengelmann.
Its KiK discount stores are a familiar sight in all Germany cities, with fluorescent strip lighting and red wire bins piled high with plastic sandals and cut-price fleece tops.
