The subsidiary of the Irish textile discounter Primark, which is responsible for Germany and Austria, took stock of its latest reform measures on Tuesday. In a letter to employees, Christiane Wiggers-Voellm, managing director of Primark Germany and Austria, and human resources manager Benjamin Weidmann also confirmed the future strategy for the local market.
Three German branches have to close
Following the recent closure of the Primark branch in Gelsenkirchen, the Krefeld and Kaiserslautern locations are also facing closure. They are scheduled to close over the next year. “Contrary to original planning,” the store in Frankfurt’s northwest center could continue to operate “due to changed cost structures,” the letter states. This would “secure 140 jobs”.
At the same time, branches in Hanover, Stuttgart, Düsseldorf and Cologne were reopened after the sales areas were downsized and modernized. The stores in Leipzig and Dortmund are to follow later this year. “The stores are now better adapted to the needs of our customers. “They want clearer and more compact sales areas for a better shopping experience,” was the reasoning behind it. Overall, the clothing supplier has also adapted its collections “to regional needs”.
Primark wants to expand with smaller stores in Germany in the future
With the measures implemented so far, Primark has “created the conditions for the growth strategy that we want to develop in 2024,” it says in the letter. The goal now is “in a second step to specifically expand our branch network in previously undeveloped regions and with smaller stores.”
Primark’s business in Germany had suffered in recent years, not least because of overly large, unprofitable stores, some of which also competed with each other because they were too close. The company then decided to change course for the local market.
Primark’s annual sales are growing by 17 percent
Overall, Primark was able to grow strongly in the 2022/23 financial year, which ended at the end of September. As the parent company Associated British Foods Plc (ABF) announced on Tuesday morning, Primark’s global sales reached 9.0 billion British pounds (10.4 billion euros), exceeding the previous year’s level by 17 percent (+15 percent adjusted for currency effects). ). The clothing chain also presented “good results” in Germany and achieved an increase in like-for-like sales, ABF explained.
Primark’s operating profit grew by 30 percent to 717 million British pounds (826 million euros). However, adjusted for special effects, it fell by three percent to 735 million British pounds.