By Alexis Flynn
Bargains will be back at Boston's Burnham Building, thanks to a
fast-growing European retailer making its first inroads in the
U.S.
Primark, a clothing chain whose formula of fashionable looks at
rock-bottom prices has proved a hit with U.K. shoppers, said
Wednesday it plans to open its first U.S. store late next year in
the former Boston home of the original Filene's Department
Store.
"After extensive research, it has been decided to take the
concept to consumers in the U.S.A.," said Primark's owner,
Associated British Foods PLC. The company, whose operations range
from retail to food products and ingredients, said Wednesday that
profit rose 26% in the six months to March 1, helping to fuel a 9%
surge in its shares in morning London trading.
Boston has waited nearly a decade for retail to return to the
Burnham Building, which had been home to both the Filene's flagship
and the bargain basement that grew into the separate Filene's
Basement chain. Both chains are defunct, and the Burnham Building
has been a vacant shell behind its landmark facade for years.
Primark said it is negotiating for other retail space in the
U.S. Northeast, planning to open additional stores in 2016.
In trying to break into the U.S., Primark will be following a
trail blazed by much larger rivals Inditex SA, parent of the Zara
chain, and Hennes & Mauritz AB.
However, while those companies used their online businesses to
help develop market share, Primark, which has eschewed selling its
clothing online, will rely on replicating its successful model of
wooing customers with cheap prices unavailable elsewhere.
The retailer, which began life as Dublin clothing store Penneys
in the late 1960s, has had a swift rise since the early 2000s,
expanding across Europe with its offering of trendy, affordable
garments. It now has 268 stores, mostly in the U.K., Ireland and
Spain.
Primark's reliance on cheap labor has also created
controversy.
Last year, a Bangladesh garment factory that produced clothes
for companies including Primark collapsed, killing more than 1,100
workers.
Primark has since paid $12 million in compensation to victims
and families affected by the disaster.
Associated British Foods reported pretax profit of GBP434
million ($729.6 million) for the half-year ended March 1, compared
with GBP411 million a year earlier. Revenue of GBP6.21 billion was
down from GBP6.33 billion a year earlier.
The results were "achieved with the benefit of strong
performances from Primark and grocery, an encouraging improvement
at ingredients and a lower interest charge which was, in large
part, due to the group's strong cash flow," Chairman Charles
Sinclair said in a statement.
Razah Musah Baba contributed to this article.
Write to Alexis Flynn at alexis.flynn@wsj.com
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