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Primark signs up to move units in Marketgate

Chris Satori

Fashion retailer Primark has signed an agreement with the owners of Lancaster's Marketgate shopping centre, Allied (Lancaster) Ltd, for a 50,000 sq ft store - which will make it the biggest retail occupier in the city of Lancaster. The store will occupy the Market Hall, disused since the Market closed in September 2012, and also additional retail units to extend through to a frontage on the precinct's central Cornmarket.

The potential deal was under consideration back in 2012, when it was first reported in Virtual-Lancaster by John Freeman. (see report: Welcome to Pri-Market?). The City Council held the 99 year lease on the Market Hall until mid-2013 when it bought itself out of the contract for a disclosed sum, estimated to be in the region of £20 million. Planning permission was sought in November 2013 for the extensive modifications required to create a large 'anchor' retail unit, adding balance to a city centre potentially tilted by the planned Canal Corridor development at the further end, and it has been granted. The affected premises are empty or in the process of vacating and the £10 million rebuild is likely to begin soon to take advantage of the milder season.

Primark has operations in the UK, Spain, The Netherlands, Portugal, and Germany with over 250 cut-price fashion stores, expanding vigorously through the recession with annual revenue around £1 billion a year.

Last week the retail giant coincidentally announced that it will begin making long-term payments to the 580 workers (or their dependents) of Primark supplier, New Wave Bottoms, which occupied the second floor of the eight storey building, who died, or were injured as a result of the Rana Plaza building collapse in Bangladesh in April 2013. The payment will amount to some £5.5m, with around one third already distributed in early support to the workers or their families.

The company was prominent at the forefront of the response to the tragedy, being the first UK brand to sign the Accord on Fire and Building Safety in Bangladesh, in May 2013, committing to financing and implementing a joint fire and building safety programme.

The brand is owned by Associated British Foods, whose chief executive, George Weston, announced in June 2013: "We must get away from the days of the past where companies parade their ethics as a marketing tool.” His comments came as Primark saw sales jump an impressive 22% to £4.27 billion, with pre-tax profits up 44% to £514 million.

The company has been criticised in the UK for using unpaid Workfare labour. This is a national subsidy to large corporations in which unemployed people, under threat of losing their basic welfare benefits must work for them in unskilled roles unpaid for placements up to six months, when they are replaced by a fresh supply of unpaid labour and allocated to another corporation. This subsidy from the Benefits System to influential corporations gives them a competitive advantage over local businesses, who cannot transfer their payroll liability to the DWP. The placement must include a training element, such as habituation to conforming to the requirements of the beneficiary corporation.