By  on April 23, 2014

LONDON — The Weston family is preparing for its mass fashion encore in the U.S.

OnWednesday, Associated British Foods plc, the publicly quoted companyowned by the Weston family, revealed plans to take Primark to the U.S.market.

The first Primark store will open in Boston toward theend of 2015 on the site of a former Filene’s department store, with70,000 square feet of selling space.

The store will be in thehistoric Burnham Building, which is currently being renovated, atDowntown Crossing. Primark also plans to open warehouse facilities tosupply future stores.

“After extensive research, it has beendecided to take the concept to consumers in the USA,” ABF said in astatement that came out simultaneously with its 2014 interim resultsupdate.

Primark follows Joe Fresh into the U.S. market. Fresh isowned by Canada’s Loblaw supermarket chain, which is controlled by theWeston family, whose vast retail portfolio also includes stores such asSelfridges, Holt Renfrew, Brown Thomas and Fortnum & Mason.

JoeFresh has been aggressively opening freestanding stores in the U.S.,and began opening shops-in-shop in J.C. Penney units last year. Thebrand is now looking to expand into overseas markets.

During acall with financial analysts to discuss his company’s interim results,George Weston, ABF’s chief executive officer, said “a handful” ofPrimark stores were planned for the American northeast, and that Boston“feels like a good city” to plant the first flag. He pointed to thecity’s young and vibrant population, its abundance of colleges anduniversities and its public transportation system, as well as its“cultural connections” with Europe.

Although Weston declined toput a price tag on the future openings, during the call one analystproffered an estimate 100 million to 200 million pounds, or $168 millionto $326 million at current exchange, in up-front costs, including newstores, warehousing and shop fits.

An industry observer said theU.S. rollout would be similar to those in Europe: “ABF opens a smallnumber of stores at first, they look and they learn and then they goforward.”

Primark is a mass-market fashion retailer beloved ofbargain-hunters across Europe and its Oxford Street flagship in Londonhas become a tourist destination. It has more than 250 stores in eightcountries across Europe: Paris will have three Primark units by the endof the year and major new locations are set for Cologne, Cardiff andBerlin. The company said Wednesday it also plans to increase itswarehousing space in Spain and Germany to keep up with demand at itsstores there.

The retailer is also present in cities such asRotterdam, the Netherlands; Innsbruck, Austria; Lisbon, and Madrid, andhas concessions at Selfridges stores in London, Birmingham andManchester, England. The stores stock baby and children’s wear, women’sand men’s wear, homeware, accessories and beauty products. Prices rangefrom children’s T-shirts at 1.50 pounds, or $2.52, and a gilet with fakefur trim at 9 pounds, or $15.12, to a tasseled shoulder bag for 12pounds, or $20.16, and a men’s two-button tweed jacket for 35 pounds, or$58.80. Primark opened its first store in Dublin in 1969 under the namePenneys, and Penneys remains its trading name in the Republic ofIreland only.

Freddie George, retail analyst at Cantor FitzgeraldEurope Research in London, said the U.S. is a natural market forPrimark to enter, and that its mass-market pricing could undercut manyof its local competitors. “It’s clear they are serious about the U.S.market and want to succeed, which is why they want to test it outfirst,” he said.

“Primark’s combination of fast fashion, decentquality and bargain-basement prices in a department store format will beunique and successful in the U.S. market,” said Craig Johnson,president of Customer Growth Partners. “In the U.K., Primark is aphenomenon, and even though its expansion in continental Europe is stillin its first few years, we’ve been tracking its progress and its uptakehas been very strong. Primark is like a Wal-Mart for apparel only, butwith a fashion sensibility much nearer to H&M, with fast fashion,basics, shoes and accessories, both market and owned brands, housed in amidtier department store — and with a bit better quality than H&Mor Forever 21. By our calculations, Primark is running at over $800 asquare foot, exceptionally high annual productivity for a departmentstore.”

In the U.S., retailers are seen stepping up storeclosings. Primark is seen as a likely taker for vacated sites,particularly those from Sears and J.C. Penney. Johnson said typicalPrimark stores are 70,000 to 80,000 square feet, with the Oxford Streetflagship in London much larger.

Stephen Springham, senior retailanalyst at Planet Retail, a consulting firm that’s part of the WGSNGroup, said Primark expects to open more than a million square feet ofnew space this year, accelerating growth. “Following recent storeopenings in France, Primark’s European footprint now covers sevencountries — France, Spain, Germany, the Netherlands, Belgium, Austria[and] Portugal. But unlike most of its peers, Primark has not taken thelow-risk franchise option. All its international stores arecompany-owned, the business effectively backing itself and putting itsmoney where its mouth is. Higher risk, but higher reward.”

Cushman& Wakefield, which represented Millennium Partners in its long-termretail lease with Primark at the Millennium Tower/Burnham Building,said Primark will lease a total of 112,000 square feet on four floors inthe eight-story building of which 70,000 square feet will be sellingspace.

The U.S., because of its size, diverse population andshopping habits that differ from those in Europe, has a reputation as agraveyard for U.K. businesses looking to expand there. The most recentfailure was Tesco’s Fresh & Easy supermarket chain, which pulled outof the U.S. last year following a severe contraction in 2012-13profits.

George said he did not see any connection whatsoeverbetween Tesco’s announcement last week that it plans to open sevenstores for its F&F mass-market clothing line — also on the eastcoast of the U.S. — later this year, through a franchise partnershipwith Retail Group of America.

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