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Why is M&S losing ground to Primark?
23
Nov '13
Britian’s biggest clothing retailer, Marks & Spencer (M&S) is losing market share to smaller rivals such as Primark as austerity pushes hard-pressed Britons towards trendy budget fashion. 
 
M&S, the 129-year old brand, is in a stiff battle for survival as fast-fashion chain Primark gains foothold in the British clothing retail industry.
 
Latest financial results of the two companies tell two different versions of the British high street.
 
While Primark, which is part of the Associated British Foods group, and was launched in 1973, reported a 22 per cent surge in revenues to 4.27 billion pounds in the year to September 2013, M&S continued to see sales plunge for the ninth straight quarter.
 
Primark reported a 5 per cent increase in like-for-like sales in the year to September 2013, a stark comparison to M&S which saw like-for-like sales dip by 1.3 per cent in the three months ended September 28, 2013. 
 
The impressive revenue performance saw underlying profits of Primark rise 44 per cent to 514 million pounds in the year to September 2013, while M&S disappointed as underlying pretax profit slipped by 8.9 per cent to 262 million pounds in the six months ended September 28, 2013. 
 
One of the main reasons for Primark’s overwhelming performance is the difference in pricing of its offerings with M&S. With its fast-fashion focus, Primark offers discount clothing which provides value for money to cash-strapped Britons.
 
In these times of austerity, where wage growth is lagging consumer inflation, young Britons are flocking towards fashion brands which are offering trendy but affordable clothes such as Primark, compared to M&S which is catered mostly to the more affluent classes.
 
A Primark jumper costs just 3 pounds, compared to an M&S classic merino wool rollneck priced at 99 pounds.
 
Primark’s success comes despite the fact that it doesn’t sell anything online. While most fashion brands are trimming real estate space, Primark is adding new stores. Primark’s shop layouts which include video screens and cool displays may also be one of the reasons why it is attracting more footfalls.
 

Fibre2fashion News Desk – India

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