Truworths to launch value clothing chain Primark

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South African retailer Truworths is launching a new value fashion chain called Primark – no relation to the international retailer of the same name. Truworths plans to open approximately 15 Primark stores over the next few months, with an average store size of 100m² during the launch trial phase. These will be a mix of standalone stores and others located in existing Truworths-owned stores.

The launch of Primark suggests that Truworths – which also owns Identity, YDE, Uzzi and Earthchild – hopes to tap into the growth opportunities present in the budget clothing market focused on lower-income consumers.

Subdued economic growth and the financial impacts of the Covid-19 pandemic on consumers are driving a retail preference for value purchases over premium goods. Nedbank’s Tasmika Ramlakan stated that this has been especially evident in the clothing category, where value players such as Mr Price and Pepkor have generally performed better than their mid-market and premium competitors.

In its interim results report, Truworths said that the new Primark brand will offer “good quality at great value and highly competitive prices yet reasonable margins”, and will be strategically aligned with “suppliers that can react and respond with short lead times”. The merchandise mix will focus on carrying a wide range of volume basic and coordinated fashion items that are seasonally appropriate, and available in multiple colourways.

In terms of brand positioning, Truworths said that Primark will be a youthful, fashionable, commercial and aspirational value-brand, with an energetic and vibrant store experience to reflect these qualities. The company added that Primark will depict “a strong sense of current social values”, including local production, sustainability, recycling, charity and community involvement.

Truworths will also be launching Fuel, which it described as a young progressive casual brand with a streetwear edge. Just like Primark, Fuel stores will exist both as a standalone format and as a shop-within-a-shop, with 20 stores planned to open within the next few months.

“There is a focus on cool, commercial and trendy product. The range is bought deep and narrow with the logo being clearly distinct and visible on all garments. The brand has a good perception of excellent value and good quality. Quick response and local production will drive a significant portion of this range to capitalise on focused product offering with enhanced speed-to-market,” said Truworths.

Asos snaps up Topshop and sister brands in £295m deal

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British online retailer Asos has acquired Topshop along with the Topman, Miss Selfridge and HIIT brands from fashion retail group Arcadia, in a deal valued at £295m ($411m).

Philip Green’s Arcadia Group collapsed into administration in November last year, putting 13,000 jobs at risk.

Asos has however not agreed to buy the four brands’ 70 stores, putting the jobs of 2,500 high street retail workers in question. Only 300 head office staff will be saved as part of the deal, to help Asos with design, buying and retail partnerships.

Arcadia Group as a whole had 500 stores across the UK when it entered administration.

Asos is paying £265m for the brands and £30m for stock.

Strategic opportunity

Asos described the deal as a compelling strategic opportunity in support of its mission to become the number one destination for fashion-loving 20-somethings worldwide.

“These are strong brands that resonate well with our core customer base. Brand equity is strongest in the UK and they have an established presence in both the US and Germany, two of our key strategic markets. The Asos multi-brand model has our Asos brands at the core, supplemented by a curated edit of the best product from the most relevant brands globally. This transaction allows us to bring iconic brands in-house, allowing us to overlay our core strengths and transform them into leading digital first brands,” said Asos.

Nick Beighton, Asos CEO, commented: “We are extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands. The acquisition of these iconic British brands is a hugely exciting moment for Asos and our customers and will help accelerate our multi-brand platform strategy.

“We have been central to driving their recent growth online and, under our ownership, we will develop them further, using our design, marketing, technology and logistics expertise, and working closely with key strategic retail partners in the UK and around the world.”

The transaction is expected to be finalised later this week.