Primark is plotting to become the hottest destination in teen retail.
The discount Irish retailer has ambitious expansion plans in America. According to a recent note by Morgan Stanley, Primark poses a real threat to the big names in teen retail.
The “rapid entrance of low cost fashion players (including Primark)” is likely to hurt sales at American Eagle, according to the analysts. The brand is starting by opening 10 stores on the East Coast.
Like Forever 21 and H&M, Primark offers the latest designs at insanely low prices. A handbag costs $US9, while leggings are just $US6. Boots will run you about $US24.
These low prices put Primark ahead of longtime teen retailers Abercrombie & Fitch, American Eagle, and Aeropostale. While these companies have made steps to offer cheaper clothing, they are still much more expensive than fast fashion.
And in teen clothing, cheaper is better.
A recent report by Morgan Stanley shows that millennials are spending more on expenses like rent, mobile phones, and personal services than young people a decade ago. This leaves less money for buying clothes.
For years, Abercrombie & Fitch and others ruled teen retail. Young customers unquestioningly bought the brands’ logo t-shirts and expensive jeans.
But fashion fashion retailers have changed the game. These brands offered wider assortments, cheaper prices, and fresher styles than the typical teen retailers.
As a result, teens were hooked and haven’t looked back.
Primark’s US expansion should scare traditional teen retailers.
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