Will Primark conquer America through Sears?

When the fast-fashion chain Primark announced earlier this year it would open its first store in the former location of Filene’s in Boston in time for Christmas 2015, it also promised further news would be coming on other locations planned to open in the Northeast. Now, we know, at least seven of those will be on sites leased from Sears Holdings.

Two of the locations Primark plans to lease include space in the King of Prussia Mall in King of Prussia, PA and the Staten island Mall in Staten Island, NY. The King of Prussia Primark will occupy over 100,000 square feet, while the Staten Island store will measure 70,000 square feet.

"Partnering with a globally recognized brand such as Primark to help establish its store base in the Northeastern United States is testimony to both our attractive store locations and our focus on transforming Sears by working with other retailers, mall owners and brands," said Edward Lampert, Sears Holdings chairman and CEO, in a statement (apparently free of irony).

Some believe the seven leases with Sears Holdings represents just the beginning of more real estate deals between the two companies.

An article in the Financial Post included speculation that Sears Canada and Primark could also make a similar deal.

Another piece on The Telegraph site pointed out that Primark could use other Sears Holdings’ locations as a jumping off point to expand through the rest of the U.S.

BrainTrust

Discussion Questions

Do you think Primark will succeed in the same locations where Sears has failed? How likely is it that Primark will move into Sears’ spaces across the U.S. and Canada?

Poll

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Chris Petersen, PhD
Chris Petersen, PhD
9 years ago

It’s a sad state of affairs when Sears’ remaining value asset is store locations that can be leased to other retailers.

It appears that Primark is very focused on picking prime lease locations with market potential, like the one at King of Prussia Mall. If they continue to pick the right locations, it could be a very efficient way to roll out stores.

It also says a great deal about Sears’ rumored “turnaround” strategy. When they are willing to lease 100,000 square feet in a key Northeast market location, that seems to be more about stopping the bleeding versus growth.

This will be a grand retail experiment for sure! If Primark shows reasonable results in leased Sears locations, it is a statement that “location” is still necessary, but not sufficient for retail success with today’s omni-channel consumers.

Kelly Tackett
Kelly Tackett
9 years ago

Sears’ failure is less related to its store locations but rather what’s inside of them. And while the locations of five of the seven leases haven’t yet been released, I would expect that Primark has done its due diligence (it’s very methodical in its continental European expansion) and the malls will have the traffic needed to build awareness of the brand here in the States. Sears won’t likely benefit from cross-shopping, and despite management suggestions to the otherwise, this is more about finding a more palatable way to offload unproductive real estate.

As for Canada, the real estate market is far more crowded with new entrants and domestic expansion so yes, it is a plausible way for Primark to expand into Canada, but I fully expect a trial run here in the U.S. before Canada is even considered.

W. Frank Dell II, CMC
W. Frank Dell II, CMC
9 years ago

Many have said Sears Holding is simply a real estate play. Leasing store just proves this point. Sears Holding will become a commercial leasing company and be out of retailing. Primark’s success is dependent on its merchandising and store operations. While location is important in retail, many Sears and Kmart locations have lost their edge. Depending on how successful these early sites work out, they may take over some, but not all Sears locations.

Ed Rosenbaum
Ed Rosenbaum
9 years ago

It has been said many times that Sears’ most valuable asset is real estate. It is becoming a reality. I have no idea what Primark brings to the table, but with the planned store openings we will soon find out.

vic gallese
vic gallese
9 years ago

For the good of retail, I certainly hope so. I don’t see why not. Sears’ issues are mostly product, price, promotion, and execution—not location. This could give their turnaround more runway!

If Primark can continue their cheap-chic run, they should succeed. One would expect Primark to expand if this seven store experiment is successful. Win-win for both companies! You don’t see many of those.

Carol Spieckerman
Carol Spieckerman
9 years ago

Retailer-to-retail partnerships are on the grow in the U.S. and common elsewhere (ever visited a Sears store in Mexico and checked out the Pier 1 shop?). Primark’s decision to leverage Sears’ platform for its US expansion is no different from Loblaw scrapping its ambitious stand-alone store roll out plans for Joe Fresh in favor of partnering with J.C. Penney.

Craig Sundstrom
Craig Sundstrom
9 years ago

Could some retailer succeed at (soon to be) former Sears locations? Probably. Is Primark the one to do it? I’m less sure.

William Passodelis
William Passodelis
9 years ago

Primark is going to have to make itself known. There is now a fair amount of fast-fashion available. If Primark takes over the space and Sears is gone on that level of the mall—that may be better for Primark than being a shop inside Sears.

I worry that people will not pass H&M, Forever 21, and Zara to go into Sears to go to Primark. They may venture to the old Sears space to check out Primark, but they really need to be on their game because that first visit will set the tone. They certainly do have a winner in the King of Prussia location. It will be interesting to see how this plays out—and it is a TERRIBLY sad statement for Sears (this is how it will end—as someone else stated—”Sears Holdings” will be a real estate company).