Primark

Rapid changes in media, transport and communications technology have made the world economy more
interconnected now than in any previous period of history. Nowhere is this more evident than in the
world of textile manufacture and clothing distribution. Consumers want fashionable clothes at
affordable prices. Much of high street fashion is produced in various countries across the world.
Businesses source clothes from countries like India, China, Bangladesh and Turkey because of lower
material and labour costs in these countries. In order to meet consumer demand, Primark works with
manufacturers around the world.

Primark has almost 200 stores across Ireland, the UK, Spain, Netherlands, Germany, Belgium and
Portugal. Primark”s annual turnover accounts for a significant proportion of ABF”s revenues and
profit.

Primark’s target customer is fashion-conscious and wants value for money. Primark can offer value
for money by:
  * sourcing products efficiently
  * making clothes with simpler designs
  * using local fabrics and trims
  * focusing on the most popular sizes
  * buying in volume
  * not spending heavily on advertising.

Primark’s business growth comes from meeting these customer needs whilst continuing to expand
stores and move into new markets.

Important business principles for Primark include respecting human rights and setting guidelines
for appropriate conditions of employment in its suppliers' factories. Primark has over 600 major
suppliers in 16 countries. These companies provide employment for over 700,000 workers in three
continents. Primark is committed to making sure that its partners, both factories and suppliers,
also act responsibly towards their employees.

 Typically, textiles are manufactured in low-wage/high manual skill economies such as are found
mostly in the developing world. Factories in countries such as India or China may supply a range of
retailers and brands, producing goods according to each individual retailer's specifications. In
these circumstances, the factory sets the same wage rate to employees, regardless of which retailer
the goods are for. At least 95% of the factories supplying Primark also produce for other high
street retailers.

Sustainability

http://legacy.businesscasestudies.co.uk/company_images/158/412/12801482402.jpg Good business
practice involves being sustainable over the long term. A business is sustainable when it is able
to make profits for shareholders, offer good employment opportunities for its staff, pay taxes to
the governments of countries in which it operates, and at the same time give consumers what they
want (e.g. products that represent good value for money at affordable prices). A business that
makes a profit is able to make an important contribution to society and to look after all of its
stakeholders.

Operating in an ethical way may incur additional costs to a business when compared with other
retailers and companies who may not do business in the same way. For example, Primark bears the
cost of carrying out all audits. Then there are its costs associated with working with ethical
partners. An example of this is Primark”s partnership with Nari Uddug Kendra (NUK). This is an
organisation supporting women's rights and health in Bangladesh.