Primark avoids online sales and bets on its business mode

Confinement measures such as mobility restrictions and especially the closure of stores has been a barrier to the sale of products such as clothing. Some companies like Inditex, H&M or Mango have been able to survive thanks to the sales made through their online channel.

Inditex worked during the confinement months to launch the ecommerce of its Lefties line in September, the only one that still did not sell online. The company knew that this was the only way to avoid major losses, as the future was uncertain.

Instead, other companies like Primark have avoided reinventing their business, betting on maintaining their business model. This decision has caused them to have big losses and it is expected that it will continue to have them, since the latest restrictions that Europe has implemented in this month of January could cost you over a billion pounds in lost sales.

Primark has been focusing on putting up large stores on the main streets of the countries where it is located and in shopping centers. This makes it compete with Zara, always looking for bigger stores and in more famous areas. However, Primark stays out of business online unlike most fast fashion brands, which is making it a case study.

The latest closures could cost the company over a billion pounds. “Are we losing sales here during these store closures? Yes, that is not in dispute here … But that does not mean that it pushes you to make wasteful decisions about changing a winning business model”Explained John Bason, the Chief Financial Officer of AB Foods (Primark owner) to the portal Bloomberg.

For him, selling online is not a good idea, since “we wouldn’t make money off it and no one else does either“. He Primark CEO has also been against publicly of the change towards online sales.

Measures to survive

During the month of December, the British company opened some of its stores for 24 hours and was looking for new stores to open in Rome or Miami. The last of the establishments was opened in Paris in August and got great anticipation (there were even queues).