Primark confident it can succeed in America, says finance boss

John Bason, finance director of Primark owner Associated British Foods, said its success across the many European markets it trades in has given it confidence it will be a hit in the US.

Retailers including Tesco, Dixons and Marks & Spencer have all retreated from the US after failed attempts to conquer the market.

Bason said: “Just because we’re a UK retailer does not consign us to failure. We have 69 stores in seven continental European countries which all have different demographics from Lisbon to Berlin.”

Primark has signed for its first store in a 70,000 sq ft shop in Boston in the Burnham Building, the former home to the famous Filenee’s department store. 

Bason said that it was likely that Boston would not be its only US store opening in 2015 and revealed New York State and Pennsylvania are on its hit list. House broker Panmure Gordon executive director Graham Jones said that Primark would look to open around 10 stores initially, giving it 500,000 sq ft in the country. 

Primark will join a bustling value fashion market in the US, which is home to big established players including Forever 21, Gap-owned Old Navy, Target and Walmart.  Jones said that Primark would be able to offer prices similar to US giants Walmart and Target.

Bason acknowledged the competitive US value fashion market but pointed out that it had succeeded in Germany, which is the “home of value”.

Bason said that Primark’s model of “great value prices, fashionability and great store environments” was “not easy to replicate” by rivals.  He added: “The breadth of choice is something that differentiates us.”

Conlumino group director Maureen Hinton said it was easier to expand in the US in clothing. She said: “This is a different time and a different retailer whose unique young fashion proposition should score top marks with American shoppers.”

Hinton said the popularity of H&M, Topshop and Inditex’s brands indicated the demand for international fashion in the US.  “This is a fashion brand that has real potential to become truly global eventually,” she added.

Bason said the US move showed that it has “ambitions to open on a broader front”. Primark already operates stores in countries including Germany, Spain and France.

Jones said he believes the US launch will be a success and will “dramatically increase Primark’s long-term growth potential”.  In September Jones predicted Primark could treble its 2012 profits from £365m to £1.32bn in 2023.