Report on Analysis of Primark Fashion

Running head: ANALYSIS OF PRIMARK FASHION
ANALYSIS OF PRIMARK FASHION
Name of the Student
Name of the University
Author Note

1ANALYSIS OF PRIMARK FASHION
Executive Summary
The report is based on the analysis of a business with respect to the external environment in
which the business operates. The company that is taken into consideration is Primark.
Primark is a retailer of clothing items which has its origins in Ireland. The other countries
where the company operates includes USA, United Kingdom and many more. The analysis of
the company is done with the help of two models mainly, PESTLE and SWOT. PESTLE is
used to analyse the external environment of the business, that is, the country United Kingdom
where Primark operates. On the other hand, SWOT analysis is used to examine the various
aspects of the business operations of Primark related to its strengths and weaknesses and the
related opportunities and threats. The report has been concluded by the learning that both the
models are useful for the successful analysis of the business of Primark.

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Table of Contents
Introduction....................................................................................................................3
Discussion about two theories related to Primark Fashions...........................................3
PESTLE Analysis.......................................................................................................4
SWOT Analysis.........................................................................................................7
Porter’s five forces analysis of UK Clothing market.................................................9
Comparison of the two models....................................................................................10
Conclusion....................................................................................................................13
Recommendation..........................................................................................................13
References....................................................................................................................14
Appendix......................................................................................................................17

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Introduction
The environment of business of any country is ever changing and the functioning of
the business depends on the external environment of the country. The analysis in this report is
based Primark Fashions which is a clothing company of Irish origin. The company is a part of
AB foods and has its headquarters in Dublin, Ireland. Primark Fashion was founded in the
year 1969. The company had opened its first store in Dublin and further expanded in other
countries including United Kingdom, Spain, Austria, France, United States, Portugal,
Slovenia, Netherlands, Italy (Primark.com 2017). The analysis in this report is based on
the operations of Primark Fashion in UK, from where around 50% of the company’s total
revenue is generated. The products that are offered by the company include, clothing items
for children and new-born, confectionery products, men’s wear, women’s wear, home
accessories, beauty products and footwear. The company has more than 315 stores all over
the world and the largest store of Primark is located in Manchester. Primark fashions has
recently started its operations in USA as well. The company has become a leader in fashion
products that is low-cost and disposable in nature (Primark.com 2017).
Discussion about two theories related to Primark Fashions
Primark has shown huge growth in turnover since the last two years which has
amounted to 5.4 billion pounds for 2015. The sales of Primark in the year 2016 was around
5.9 billion British pounds. The offering of low-cost fashion by the company has given a
completely different position to Primark. This quality of the company has been successful in
attracting many customers towards the company. The environment of business in UK in
relation to Primark Fashion is analysed based on PESTLE and SWOT theory in the following
discussion.

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PESTLE Analysis
Political factors- As discussed by Andersson and Nilsson (2016), Britain had
separated from the European Union in the year 2016 in the month of June and this was
expected to lead to huge economic and political uncertainty or turmoil. The turmoil that was
sparked by Brexit which is mainly a term that refers to the withdrawal of the United Kingdom
from European Union. The process related to Brexit has affected the businesses that are
operating in the United Kingdom. Primark, however has gained a lot from the fall of the
pound against Dollar and Euro after this withdrawal happened. The parent company Primark,
ABF was not satisfied by the decision as it feared the loss of the profit margin based on the
sales of Primark in the United Kingdom. The sales of Primark have seen a rise after the
Brexit effect. There was 13% increase in the sales after the fall of pound in the year 2016
(Ft.com 2017).
Economic – The value of pound had dropped to the lowest after the withdrawal of
United Kingdom from the EU and this fall has increased the effect of the Brexit (Whiteley,
Clarke and Goodwin 2017) . According to Dhingra et al. 2016 this fall has put immense
pressure on the status of London as Europe’s financial hub with lot of investors. ABF or
Associated British Foods had predicted that the decision of United Kingdom to leave the EU
will have a negative effect on the financial markets of the country as well as the business
environment. The fall of pound has however acted as a benefit to the Primark Fashion and
other retailers as well. The value of pound has fallen from 1.54 in the year 2015 to 1.33 in the
year 2016.

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Fig. 1 (Fleisher and Bensoussan 2015)
Social Factors – The most commonly faced problem in the UK related to the retailers
of clothing items is the rise of obesity among the citizens and the rising age of the population.
The majority of the men and women population in the country are classified as obese and due
to this reason the female shoppers who are overweight tend to avoid buying clothes from
some of the retailers who do not offer clothes of plus sizes (Anand and Grover 2015). This
problem has led to a huge market gap for the retailers of clothes and Primark has also faced
this in the recent times. According to Hunt and Wheeler (2017), it has been depicted that the
population of Europe is aging fast and the growth of the aging population can have effects on
the cloth retailers as the disposable income of the people of the age between 55 to 64 is high.
This has caused a growth in the online and offline shopping trends of these aged people and
the retailers have gained a lot from this.

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Technological factors – The growth and development of the e-commerce sector has
accelerated in the recent times and this has helped in opening up the market for more
competition. The traditional businesses have been replaced by the online businesses in the
UK. This has led to the formation of a competitive environment due to the relatively less cost
of this mode of business and the ease of shopping as well. This trend has caused problems for
the traditional companies like Primark. The changes in the technological environment of UK
has changed the picture of retail market.
Environmental – The environmental trends of UK also have an effect on the business
of the retail clothing companies., stated that these trends have led to many changes in the type
of clothes worn by the people. The materials that are adopted by the retail clothing companies
like Primark are recyclable and the packaging is done with paper well. The clothing lines that
are being launched by Primark are linked to organic cotton and some other materials that are
friendly to the environment.
Legal – The legal factors related to the clothing and retail industry in United Kingdom
has changed as well. The government has levied new employment regulations that has
affected this industry, which was mainly the initiation of the legislations related to the
Workplace Pension policy. The government has made this pension policy compulsory for
every type of company and the companies have to contribute 3% to the pension funds of the
employees for the British workers who are eligible (Busch and Matthes 2016). For more
information, please refer to the Appendix Figures 4 and 5.

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Fig. 2 (Fleisher and Bensoussan 2015)
SWOT Analysis
Strengths – As discussed by Begg (2016), Primark Fashion has experienced a huge
amount of success since the last two years, the reason being that the company has the lowest
prices and it is known to produce clothes that are considered as disposable fashion. This has
resulted in the huge growth of Primark in the years 2014 and 2015. The core strength of
Primark was the idea of offering cheap clothing options and this helped the brand to
challenge and take over the Arcadia group. This also helped Primark to become the third
largest retailer of footwear and clothing in the United Kingdom (Dimitrova 2016).
Weakness – As argued by Sampson (2017), one of the biggest weaknesses of Primark
is the perception of the consumers that the company is practising unethical methods by
increasing the awareness of the public on one side about the problems related to brands
associated with fast-fashion. On the other hand, the company was a part of the disasters
related to fast fashion which caused the death of around 1138 workers in UK. The brand had

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to pay a whopping amount of 12 million dollars as compensation for the damage that was
caused due to the death of the workers. The other perception of the consumers that has been a
problem for Primark is that the brand is considered to be basic and not fashionable, stylish or
trendsetting enough (Fleisher and Bensoussan 2015). The reason behind this perception was
the low value of the products of the brand. As argued by Andersson and Nilsson (2016), the
market in UK has generated around 2.5 billion Euros of the turnover of 5.4 billion that has
been earned by Primark globally and it is reliable on Primark. The most important and
harmful weakness of the company is the lack of the ecommerce facility of Primark. (Frynas
and Mellahi 2015). The company is still successful in the UK, however the growth of the
company has slowed down and it will continue to fall if the company continues to operate
without the ecommerce availability (Gander, 2017).
Fig. 3 (Dimitrova 2016)

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Opportunities – The obesity levels of the people of United Kingdom are rising in a
continuous basis. This has resulted in a huge gap for the retailers of clothes who do not
manufacture clothes for the plus sizes. However, the companies like Primark who offer the
plus size clothes can increase their customer base in an efficient manner (Goodwin and Heath
2016). According to the previous researches conducted, around half of the population of
United Kingdom is predicted to turn obese within the year 2050 (Haron 2015). Primark has
recently ventured into the market of the United States of America as well. The company is
has opened as many as 16 stores in USA in the year 2016. This new venture of the company
will help them to earn more profits in the years to come (Kaikobad et al. 2015).
Threats – According to Hobolt (2016), the phase of United Kingdom leaving EU had
huge impacts on the business organizations or the retailers of the country like Primark. The
major operations and the revenues of the company are generated from the United Kingdom
itself. The parent company of Primark that is, ABF has also declared that decision of the
United Kingdom to leave the European Union will make the financial markets and the
business environment uncertain (Gropp 2016).
Porter’s five forces analysis of UK Clothing market
Threat related to New entrants – The new entries in the retail market of UK acts as a
threat to Primark Fashion. These new entries include Farfetch, Chanel and many more.
Threat related to power of buyers – The buying ability of the buyers in the UK
markets is having an effect on the cloth retailers of the country, as the number of alternatives
has increased in the recent years.
External Rivalry – The competition in the UK market has risen in the recent years as
the new companies have risen both in the online and the offline markets as well (Whiteley,
Clarke and Goodwin 2017).

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Threat related to power of suppliers – The supplier power does not affect the clothing
industry of UK as the raw materials are sourced from the manufacturers who get a little
amount of the profit.
Threat related to substitutes - The threat of substitutes does not much effect on the
clothing industry of UK. The reason being that the clothing needs of the consumers do not
have any substitute. Please refer to Appendix Fig. 6
Comparison of the two models
Primark fashion is a retailer of clothing items which has its origins in Ireland. The
company operates in countries like France, Italy, Germany, Ireland, Spain and United
Kingdom. The operations of Primark in United Kingdom was analysed in the above segment
(Primark.com 2017). The two models that are taken into consideration for the analysis of
Primark fashion and the business opportunities of the company in United Kingdom are
PESTLE Analysis which is used for analysing the external environment of Primark with
respect to United Kingdom. SWOT Analysis was used to analyse the different aspects of the
company itself with respect to the country where it operates (Minford 2016).
As discussed by Shabanova et al. (2015), the PESTLE Analysis is used to examine the
political, legal, economic, social, technological, legal and environmental analysis. The
withdrawal of United Kingdom from the European Union has led to an unrest in the business
environment of the country. The effect of this unrest on the retail market of United Kingdom
is examined in the political factors of the PESTLE analysis. The political condition of a
country affects the profitability of a business (Thompson and McLarney 2017). The
profitability and operations of Primark was affected by the uncertainty caused because of the
Brexit effect which is the name given to this phase of withdrawal. The economic factors of
this analysis help in analysing the effect caused by this withdrawal on the status of London as

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Europe’s financial hub. The loss of this status of London and had an adverse effect on the
business operations of Primark fashion and the many other retailers of London. According to
West, Ford and Ibrahim (2015), the social factors of this analysis have examined the effect of
the increasing age of the population of United Kingdom on their buying pattern and
capability. The other factor that is analysed is the increase in the number of obese people in
Europe. The effect of this increase has led to the rise of sales of the retail outlets which offer
plus size products. The technological factors of United Kingdom that affect the business
operations of Primark are also analysed in this model (Ramiah, Pham and Moosa 2017). The
technological advancement of United Kingdom and the increase in the rate of online
shopping has an adverse effect on the traditional retail business environment. The effect of
this online advancement on the operations of Primark in United Kingdom is analysed. The
people of United Kingdom are becoming more aware of the environmental effects of clothing
items. The effect of this mentality on the choice of clothes of the people of United Kingdom
is analysed. As argued by Masood et al. (2016), the increase of organic and environment
friendly clothes and the use recyclable materials is discussed in this model. The legal aspects
of a country also have an effect on the business operations of Primark. The recent guidelines
given by the government with respect to the regulations of employment are discussed with
the help of this model.
On the other hand, according to Haron (2015), the SWOT Analysis model is based on
the different aspects of the business itself which affects its future operations. The strengths of
Primark are related mainly to the image that the company holds of offering products that are
of low prices and are disposable in nature. This quality of the company has helped it grow
increase its profitability after the recession in the year 2008 that had led to acute financial
crisis (Frynas and Mellahi 2015). The company was able gain a huge number of customers at
that time who were facing shortage of cash. This phase had a positive effect on the growth of

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Primark. The brand was able to take over the Arcadia Group after this phase of growth. The
weakness of the company includes the perception of the consumers regarding the unethical
practice that was undertaken by the company for the manufacture of products related to fast-
fashion due to which many workers had lost their lives. As discussed by Gander (2017), this
incident involved companies like H&M, Mango along with Primark. The other perception of
the consumers that are analysed is the tendency to associate the price of a particular product
with its quality. The dependency of Primark on the retail market of United Kingdom in spite
of having operations in other countries is analysed. The market of United Kingdom accounts
for almost greater than half of the total turnover of Primark on a global basis. The absence of
Primark on the online space of retail market is another weakness that is analysed in the
SWOT model (Fleisher and Bensoussan 2015). The company is successful in the operations
in UK, however the lack of its presence on the online platforms acts as a weakness for
Primark. The rise in the numbers of obese people in United Kingdom has proved to be an
opportunity for the retail companies. The increasing investment of the companies on the plus
size clothes and the effect of this on the sales of Primark is analysed in this model. The
opportunities that have been opened for the company as a result of starting their operations in
the United States of America is analysed with the help of this model (Frynas and Mellahi
2015).
The analysis of the external environment of Primark is done with the help of PESTLE
analysis and the SWOT analysis is used to analyse the business itself. The two models solve
different purpose for the company. The analysis of the external as well as the internal
environment is required to understand the situation of the company and the environment of
business (Haron 2015).

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Conclusion
The analysis of this report is based on the detailed examination of the operations of
Primark. The macro environment of the company where it operates is analysed with the help
of PESTLE analysis. The aspects that are analysed in this report are based on the changes that
are caused on the operations of Primark after the Brexit period. This phase had affected all
the aspects of the business including the profitability. The economic condition of United
Kingdom was also affected due the Brexit phase. The status of London as the core financial
area of Europe was lost and this affected the business operations of Primark. The increase in
the obesity levels of the population of Europe affects the retail business of Europe as well.
The increasing ageing people is another factor affecting the business of Primark. On the other
hand, SWOT analysis is used to analyse the strengths of the company related to the offerings
of low cost products and increase in sales due to this. The weakness of the company related to
the perceptions of the consumers about the quality of the products of the company and the
unethical practices of the company is a part of SWOT analysis. The opportunities of the
company related to the operations in USA and the threats with respect to the absence of the
company in the online area is also a part of SWOT. The report can be concluded with the
saying both the models are required for a full proof analysis of a business with respect to its
operating country.
Recommendation
The recommendations that can be made to Primark based on the above analysis would
be that the company should plan to invest more on the plus size clothes to capture the obese
market of United Kingdom. Further, the company must increase the range of products and
plan for an ecommerce investment which will help the company in increasing its reach. The
increase in the investment of the company in USA will help them to decrease the dependency
of Primark on the market United Kingdom alone for its profitability.

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Appendix
Fig. 4 (Shabanova et al. 2015)

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Fig. 5 (Haron 2015)
Fig. 6 (Dobbs 2014)

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