Primark Germany head: “We are not immune to inflation”

Since its founding in 1969, Primark has stood for affordable clothing. In this context, the Irish clothing retailer often faces criticism, especially when it comes to the issue of sustainability. The company wants to get rid of this rather bad reputation and introduced its sustainability strategy in September. It stipulates, among other things, that by 2030 all garments would be made from recycled or more sustainable materials and that women would be promoted along the supply chain.

To ensure that end consumers are aware of these goals as well, the textile discounter, which belongs to the Associated British Foods Plc conglomerate, advertises with targeted campaigns in stores and organises influencer events such as the one at the beginning of the month in Berlin.

The “Primark Cares Corner” event saw influencers like Maria Maksimovic, seen in TV shows like “Bachelor” and “Temptation Island”, as well as musician Rola. In addition to upcycling and repair workshops, where celebrities had to wield needle and thread themselves, Thomas Ahlers, manager corporate responsibility, also introduced Primark's sustainability plans.

Primark Germany head Christiane Wiggers-Voellm was “completely impressed” with the workshop participants’ creativity. The daughter of a master tailor would have loved to take part herself. In an interview with FashionUnited, she explains with equal conviction Primark's sustainability efforts and how they harmonise with the draft legislation against greenwashing. She also explains why Primark is now raising prices after all and why some German stores will have to close.

In September, Primark presented its “Primark Cares” strategy. Was that the starting point for sustainability?

We started with Primark Cares long before we presented our strategy in September. So by the time we went public with it, we were in a position to present it as a whole strategy. When we launched it, 25 percent of our full clothing range was already made from recycled and sustainable materials. A quarter is remarkable given Primark's size, with over 400 stores worldwide, and its volume of products.

And now you're also polishing Primark's image in Germany?

We are incredibly thrilled that we got the opportunity to bring the Cares Corner to Germany, which was previously used in UK. This gives us the opportunity to get in touch with our customers to talk about it. We didn't do it enough before that, which is why in September 2021, there was this impression: 'Oh, Primark is just starting this now'. Which is not the case. But it's important in the course of credibility to tell customers in this way.

Have you been able to make any further progress so far?

The strategy we have communicated is not designed to end after just a few months. The results and objectives are long-term. We are a large, global textile retailer that cannot achieve everything on its own. We don't have our own factories. We have suppliers who produce for us. Therefore, we can only do it together. And for anything that is joint, you have to seat several people at the table - NGOs, competitors, governments, unions - and that takes time.

Nevertheless, we can already see more progress, less than six months after the announcement. The amount of 25 percent of garments sold that are recycled, sustainable or organic cotton has risen to 39 percent.

So progress only in the range of products?

We have also communicated other goals, such as our Primark Sustainable Cotton Programme. We have a goal of training 160,000 female farmers by the end of 2022, and we will get there. And then we will publish a report once a year where we will focus on what the targets were and what we have achieved.

What is Primark doing about the fact that articles made from more sustainable materials end up in the trash after just two days?

We want to offer customers a way to return their used clothes and prevent them from ending up in the trash. We rolled this out in Germany in October. It's been well received, but it's also not like we're being flooded with plastic bags. In UK, the program was rolled out a year earlier and there were 23 tons of returned clothes after the first six months. This brings us a step closer to a circular economy.

What role do the workers along the supply chain play in your strategy?

We have three pillars at Primark Cares: one is the product, the other is our world - what imprint do we leave - and the third is people. The point 'Creating living conditions and financial security' belongs in there too.

The people along the supply chain work for our suppliers and not for us directly. So it is a very big effort for us to say: We want to be present on site and cooperate, work together, exert influence. But of course they are independent factories. So we can't say, 'We're going to do it this way.' We have to have the management of the factories on board, which fortunately we have.

How do you help improve living conditions?

The Sustainable Cotton Programme is a great example for how various things can be moved at once. One part here is to improve living conditions, especially for the women on site. The program is aimed particularly at female cotton farmers. Helping them help themselves, to give them their own income and to be independent. We work locally with the Self-Employed Women's Association (SEWA), which is also very committed to women’s empowerment. With 160,000 women that we reach with the project, that's an incredibly large sphere of influence.

And with more sustainability comes a rise in prices?

Arthur Ryan founded Primark in 1969. Since day one, it's been about making fashion affordable - that's our basic claim, our DNA, and we're incredibly passionate about this subject. We believe that it has to be possible to make sustainable fashion affordable for everyone. It's not simply a matter of saying, 'well, pay 20 euros more.

Right now, given the inflation, rising gasoline and energy prices, the gap is much wider. But people still want to look beautiful, that's simply a basic need. They still want their babies to get new onesies. We just celebrated the end of Ramadan, a festival where children are traditionally dressed in new clothes.

But how do you manage to maintain your prices despite a more sustainable range?

It was clear from the start that we can't just say: We will become more sustainable and then everything will become more expensive. That's not what we want and not our raison d'être. The almost 40 percent of clothing made from recycled, more sustainable or organic cotton shows that it is possible - because we have not become more expensive in this context. Sustainability doesn't always have to be more expensive. The Sustainable Cotton Programme is about increasing yield on the same amount of land with fewer pesticides and more targeted and lower water use. Yield goes up, but costs don't. There is a tremendous amount of opportunity that we are exploring.

Keyword 'inflation'. Even Primark does not seem to be able to avoid price increases here - contrary to what was initially announced. Could you tell us more?

We are an incredibly efficient company, which has a lot to do with what happens to the goods from the moment they leave the factory to the moment they cross the checkout counter. That's where we are very lean, efficient and cost-conscious. As a result, we can keep prices relatively low, even compared to our competitors. But we are not immune to inflation. We are operating in an overall context from which we cannot extricate ourselves. Energy prices that skyrocket like this will not bypass us. That's why we have decided to increase the price of selected products slightly for the fall/winter collection. However, this does not change the fact that our customers expect and need favourable prices from us. This remains our credo and we will not change it.

Do you think Primark's sustainability messages will hold up in light of the EU Commission's draft legislation against greenwashing?

We welcome the new bills because we are already working in this direction ourselves. It is incredibly important that when you set goals, you stick to them. Our Primark Cares strategy is designed to communicate transparently and honestly with our customers.

The term Primark Cares stands for our heartfelt concern. We see the impact and the responsibility we have. It's not just something we have to do or because a law says so, but we do it because we believe in it.

In addition to the issue of sustainability, you also follow a long-term expansion strategy…

USA is a major growth market, with strong expansion planned for the next five years. And globally, we are also planning to expand strongly in the next five years.

And for Germany?

In the last two years, I have learned not to say, ‘We'll do this or we won't do that.’ If someone had asked me three years ago, 'Do you think there's going to be a pandemic and you'll have to close all your stores?' I would have said, 'No way.' If someone had asked me a year ago if a war was coming to Europe, 800 kilometres from Berlin, I would have answered the same way. That's why I have become cautious. Of course we always look: 'Where are the locations, do I still have white spots on the map and what is the competition doing?' But I can't make an announcement now that a new store is coming.

Are there red spots on the map?

We have announced two store closures in Weiterstadt in the south and Berlin-Steglitz. Again, I'm not going to say we'll never close another store. Brick and mortar retail, and the entire global economy in general, is currently moving into an uncertainty that could not have been foreseen.

How did the decision for the two store closures come about?

The reasons for the closures were very local. The shopping centre in Weiterstadt has a vacancy of 50 percent; entire mall sections are in the dark and the last anchor tenants just left. There are plans on the operator’s side to rebuild it, but that all takes time and there is no public transport connection. That's why we had to say it no longer makes sense for us. But that has nothing to do with Primark Germany or our business model. If no more customers come to a store, it's really difficult.

The other store in Berlin-Steglitz, on Schloßstraße, has also changed a lot in recent years. The shopping centre is also facing changes that don't fit our business model. We still have three stores in Berlin. We opened [the store at] Gropiuspassage in 2020. Customers can shop elsewhere at Primark, so the store simply no longer makes commercial sense.

In addition to brick-and-mortar retail, there are also digital changes: A new website.

The new website has already been launched in UK, but not yet in Germany. Customers want to reach us online, and that's what they tell us. Until now, however, it was difficult because we didn't have all the products on the old website. The new website shows a huge product range; the products are displayed differently, there is more product information available and you can see the size availability in the stores.

This will be especially great for us in Germany with our 32 stores, because there are customers who have a longer commute. And before I get in the car with three kids because they need new summer clothes, I can look in advance and assess whether it's worth driving to the store. Another option that the website will provide, but is currently not yet live, is a sign-in option that allows personalised registration and creating a wish list. The new website is expected to come to Germany in the summer.

Are you planning to develop the link between the physical store and the digital presence further?

At the moment, we are rolling out the website, which will be a big step forward, as the clicks from customers in the UK prove. Click & Collect or something similar may come, but for now it's about the new website and seeing how customers react to it.

Primark in the Netherlands is also undergoing restructuring, with more than 240 jobs to be cut. Are there similar plans for the German market?

There was an announcement about the Netherlands, but I can't say anything about it. Primark is a global company, but what sets Primark apart is that we are able to adapt to individual countries despite our global nature. So what do the customers want, what are the legal regulations in the markets and therefore you can't always 'copy and paste' - if it's done there, it's done elsewhere. Germany has a different situation. We have announced two store closures, but that also doesn't mean that everyone in other markets will announce store closures. We look at the [respective] market and what fits there at the moment.

And what fits at the moment?

We are looking to make the remaining 30 stores as successful as possible and to bring the Primark Cares strategy to customers. Only now, for a few months - after two and a half years - we have the opportunity to keep stores open continuously and to plan reasonably because we assume a normalisation of the situation. With the size of our stores and the number of employees, we don't just turn the key and open them again the next day. There are huge operational processes that have to be managed in the background. My goal as country manager is to make this market as successful as possible.

This article was originally published on FashionUnited.de. Edited and translated by Simone Preuss.