Specialist
Former Head at New Look Retail Group Ltd
Agenda
- Drivers of Primark's (LON: ABF) LFL decline, examining UK bricks-and-mortar competitive landscape – including Inditex (BME: ITX), H&M (STO: HM B), New Look – and the threat of online
- Gross margin sustainability – pricing architecture, inventory management and buying flexibility
- UK bricks-and-mortar retail expansion strategy
Questions
1.
What is your view on the current performance of the UK fast-fashion market? What data do you have regarding market performance, in terms of formats and locations but also on a category basis for the value-led segment?
2.
Who is Primark taking share from in today’s market?
3.
Do you think this market share growth is likely to continue? Or could it slow down given the turnaround of brands such as New Look and M&S?
4.
How much further could Primark’s market share grow? If it’s currently at 7.1%, what could that grow to?
5.
What is the gross margin impact of increasing the footwear division?
6.
Can you compare Primark’s relative outperformance with the decline in like-for-likes?
7.
What is Primark’s channel split between retail malls, shopping parks and high street stores?
8.
Do you think Primark is overexposed to the high street given the decline in footfall?
9.
How does average basket value typically trend as dwell times increase?
10.
If the dwell time is around 1-2 hours, does the average basket value account for that amount of time or is it likely to increase?
11.
Do these franchised products have a lower margin?
12.
Do you think sustainability poses a long-term threat to Primark’s model?
13.
Primark has stated gross margins could be pressured in 2020 due to foreign exchange movements. How much of it do you think is driven by headline pricing and discounting?
14.
What’s the typical recovery timeline if Primark were to lose 50% of its personnel?
15.
Do you think the level of discounting has been appropriate in terms of shifting stock moving into peak trading periods? Are you confident about Primark’s inventory position?
16.
How do you think Primark could improve in-store productivity?
17.
Is there any upside for in-store productivity?
18.
What do you think is an optimal number of stores for Primark in the UK?
19.
Primark is in negotiations with its landlords regarding rental costs. Do you foresee a scenario where landlords are open to reducing rental rates?
20.
Are new sites being opened at favourable rates?
21.
What’s the difference in rental expenses for a new opening vs a historical lease?
22.
Do you think it’s possible that most of Primark’s estate will eventually move down to these 20%-lower leases?
23.
Do you think it’s possible for Primark to roll out an online offering, given the price points?
24.
Would it be possible to have an exclusive online proposition with higher prices?
25.
Do you think it’s likely Primark will roll out its click-and-collect offering in the next 1-2 years?
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