The retail industry remains one of the slowest areas of the British economy to gain full recovery status, yet this does not mean that all retailers within the sector are struggling. Conversely, budget retailers in both the supermarket and fashion categories are seeing profits and revenues rise impressively year on year, allowing many to invest in expansion in order to further capitalise on this consumer demand.
This week, high street giant Primark has confirmed that it has entered into discussions with the UBS Triton Property Fund with a view to acquire the Pavillions shopping centre in Birmingham. Should these talks reach a successful conclusion for Primark owner Associated British Foods, the brand will take ownership of the £60 million complex and transform a large section of floor space into one of the country’s largest Primark stores.
In total, the Pavillions shopping centre offers 250,000 sq ft of prime retail space in Birmingham city centre, with existing tenants including Waterstones, Marks & Spencer and key Primark rival H&M. It is thought at this point that Primark would claim around half of the available space for its store, with the remaining retail units to be sub-let to other retailers.
While it is relatively commonplace for supermarkets to acquire entire sites as a means of ensuring they can expand into new areas, it is almost unheard of for a fashion retailer to make a similar move – making this something of a step into the unknown for Primark. However, this ambitious deal is thought to be a one-off for the retailer, as this will allow the brand to secure a site within the growing economy of Birmingham which is around three times the size of its existing store by New Street Station.
Primark has in recent years become one of the UK’s most successful retailers, with the chain having posted a 14 per cent year on year growth in sales only a few months ago. This success has been underlined by its positive reception in overseas markets such as Spain, France and Germany – all Eurozone countries which have faced similar economic issues as the UK and have therefore provided an ideal platform for budget retailers seeking to expand.
Later this year, Primark will also foray into the United States market, with a store in Boston expected to open by the end of the year and talks taking place regarding numerous other sites around the country. At this point, Primark has 269 stores around the world, with around 10 million sq ft of commercial space; a figure which, should the retailer continue to increase sales, will surely increase further in the coming years.
Primark is expected to make an announcement regarding the Pavillions deal within the next few days.
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