Berliners shrug off ethical worries to storm new Primark store

Thu Jul 3, 2014 8:37am EDT

* Primark expanding fast in Europe; next stop United States

* Primark under fire since Bangladesh factory collapse

* Primark says shares most factories with other brands

* Protesters seek better standards rather than boycott

By Emma Thomasson

BERLIN, July 3 (Reuters) - Thousands of bargain hunters flocked to a new Primark store in the heart of Berlin on Thursday despite a protest by campaigners demanding the Irish chain improves conditions in the factories that produce its budget tops and jeans.

Primark, owned by Associated British Foods, is accelerating the pace of its expansion in Europe, where it already has 274 stores, and in April announced it would open its first U.S. store in Boston towards the end of 2015.

Primark, which opened its first store in Dublin in 1969 under the name Penneys and launched in Germany in 2009, has grown rapidly during the economic downturn in Europe due to its rock-bottom prices and fast-changing fashions.

However, it has also drawn criticism for conditions in the factories of its suppliers, especially since more than 1,100 people died last year in the collapse of a plant in Bangladesh, where clothes were made for brands including Primark.

Primark's success is squeezing margins at Sweden's budget chain H&M, which is also trying to improve its reputation for ethical standards, particularly in its biggest market Germany, where shoppers are particularly sensitive to environmental issues and labour rights.

However, those concerns were trumped on Thursday by the desire to snap up T-shirts for 3 euros ($4) and skinny jeans for 7 euros, as thousands of shoppers, including dozens of mothers with small children, lined up hours before the store opened.

"Primark is criticised but it is not just Primark. All the big stores are the same, including H&M, because we want to have things cheaper and cheaper," said 16-year-old shopper Anna Schmidt. "I am not prepared to pay 30 euros for a T-shirt".

The new store is Primark's 13th in Germany, and it has set its sights on eventually opening more than 100 in the country, which is already home to more than 400 H&M stores.

HOAX LABELS?

Primark, which generates almost a third of AB Foods' group sales, attracted negative headlines again in recent days after labels were found sewn in garments sold in Britain purportedly from workers complaining about their working conditions.

Wolfgang Krogmann, chief executive of Primark Germany, dismissed the labels as a hoax and said the company tightly controls factory conditions, conducting 2,000 audits a year and adding it does not allow approved suppliers to subcontract.

"Ninety-eight percent of factories are shared with other brands that are making similar garments for our competitors. The difference with us is that we charge a particularly low price for the same product," he told journalists.

At the official store opening, Primark board member Breege O'Donoghue, wearing a cream jacket with gold buttons and slim fitting trousers she said only cost 42 euros, noted that Primark has been praised by the Ethical Trading Initiative, a London-based group campaigning for worker rights.

Irish Prime Minister Enda Kenny, who cut a ribbon before shoppers stormed the store, said he was proud of Primark's success and convinced by its commitment to ethical standards.

"The queues outside certainly show the strength of Primania across Germany and across Europe," he told cheering staff.

The crowds outside the new store on the busy Alexanderplatz square were not deterred by dozens of protesters holding banners with slogans like "Crime-ark" and "Fast Fashion Kills".

"Fast fashion means there is extreme pressure to meet orders. They must produce fast, fast, fast which causes accidents," said Berndt Hinzmann from German development group Inkota Network, which helped organise the protest.

"We consciously don't call for a boycott. That would mean that the factory workers wouldn't earn anything. The companies should not leave Bangladesh. They should recognise the problems and introduce structural changes."

($1 = 0.7331 Euros) (Editing by Mark Potter)

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