Value fashion giant Primark has unveiled plans to launch in the US next year. It will enter a market full of strong competition.
Why are we talking about this now?
Last week Primark joined a long line of retailers hungry for a slice of the American fashion pie when it unveiled plans to open its first US store in a 70,000 sq ft unit in Boston next year. The Boston shop will kick-off a wave of expansion, with openings in New York state and Pennsylvania expected to follow in quick succession.
How big is the US value market?
The market is estimated to be worth £202bn a year for clothing alone – £303bn including footwear, accessories, bags and leather goods – and is growing at an average rate of 3% a year, according to Conlumino.
Who are the biggest players in the US value fashion market?
American shoppers have plenty of options when it comes to value fashion. Planet Retail senior analyst Stephen Springham says: “In Continental Europe Primark doesn’t have many competitors. You could argue that the US is saturated with value fashion.”
TJX operates two of the biggest brands in the states – TJ Maxx and Marshalls. Both are positioned in the off-price category so not direct competitors to Primark, but with just shy of 2,000 stores they are formidable operators.
Gap’s Old Navy chain is positioned much closer to the value market Primark will be after, and focuses on family shopping. With 930 stores in the US alone, generating sales of $5.69bn (£3.38bn) last year – far outstripping the Gap brand – it’s a serious retailer with a flourishing online platform behind it.
Primark has already grappled with one of its future US competitors, but this time Forever 21 will be on home territory. It operates 450 stores, but with a well-established international brand that has already proved to be a hit with youth shoppers, Forever 21 occupies a strong place in the market and is perhaps the most similar offer stateside.
Along with the 1,102 Ross Dress for Less stores, turning over a staggering $10.2bn last year, value shoppers in the US are hardly underserved. And that’s before taking generalists such as Walmart and Target into account.
How might Primark succeed where others have failed?
While there is an abundance of competitors, Primark’s offer is solid, and, says Springham, unique in that it offers fashion for less as opposed to just low-priced clothing.
“It’s probably head and shoulders above most of the market,” he maintains. “It’s a great business and it manages itself very well.”
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