Business

Primark to Poland?

The Irish clothing giant, Primark, is opening its doors in Poland. According to an article published by Plus Biznesu (PB), Primark are currently negotiating various potential locations for Polish stores. The hype surrounding Primark’s possible entry to Poland has been ongoing for quite some time, with Poles even creating a Facebook fanpage and posting videos on YouTube.

To date, the closest Primark stores to Poland have been located in Germany.

As reported by PB, Primark have not officially commented on if and when they will open in Poland. However, one of PB’s sources says that Primark is currently looking at four locations, While a second makes specific reference to two locations; one in Galeria Młociny, currently being built in Warsaw by Echo Investment, and one in Krakow.

Primark did not want to comment on the matter, simply saying that as the company is listed on the London Stock Exchange, which “excludes commenting on speculation regarding future openings.” Echo Investment refused to comment.

“Primark’s possible entry is good news for customers, because it is a very large western player with an attractive price offer,” Przemysław Lutkiewicz, vice president of LPP, the retail group which includes Reserved, House and Mohito, told PB. “For us and other players in the industry, it is a signal that we need to strive for aesthetics of the product and price. Primark’s debut in Poland should not be surprising – clothing spending is growing every year (according to industry estimates, it stands at around 30 billion zloty), so the market is getting bigger and thus more attractive. After all, we also go abroad and want to compete in the world.”

“The most important question for me is: what will be the e-commerce strategy? In the offline segment, even if Primark would open 10 stores quickly, it will still be a small network. Only with an aggressive strategy for their e-store will it be able to have a huge impact on the Polish market. It is a cheap brand, and in terms of quality, not significantly different from other players already present in Poland. Today, H&M is under considerable pressure, which due to high stocks fight with sales, Primark could add oil to the fire,” Łukasz Wachełko, analyst at Wood & Company, tells PB.

In recent years clothing companies from the west have not faired well in Poland, and have pulled out of the market, for example: Marks & Spencers, GAP, Top Shop and River Island to name a few. There are many reasons that these brands were not successful, one being price competitiveness, another is that the collections did not match with fashion trends in the Polish market, writes PB.

Monika Janczewska-Leja, director of consultancy and commercial space at Savills, tells PB that one of the reasons it has taken so long for Primark to enter the Polish market has to do with the fact that Poland is not in the eurozone, creating challenges when dealing with fluctuations in currency.

“The entry of the Primark brand into the US market has proven that another currency system does not necessarily have to be an insurmountable obstacle. The decision to open the first premises in Poland would have to be contemporaneous with accepting the need to adapt the brand’s format to the specifics of the Polish market by focusing on shopping centers and reducing the size of stores to a level similar to other key tenants in this type of facilities located in our country,” Ms Janczewska-Leja tells PB.

Małgorzata Dziubińska, associate director in the Consulting and Market Research Department at Cushman & Wakefield, points out that due to several large tenants, such as Marks & Spencer or Jatomi leaving the Polish market, there are quite a few large-scale premises available, over several thousand square meters, and these are typical values ​​for this network.

“What’s more, for such a large tenant, managers and owners of shopping centers are also willing to relocate current tenants, especially those whose results are below the level expected in a given centre,” adds Ms Dziubińska.

Photo: Primark

Businesswire

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