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Penneys edges out Guinness to become Ireland’s most valuable brand

08 Apr 2020 / business Print

Penneys edges out Guinness as our most valuable brand

The top 25 most valuable Irish brands stand to lose up to 14% of brand value following the devastating COVID-19 pandemic, the Brand Finance Ireland 25 2020 Report shows.

The brand value of the world’s 500 biggest companies is set to drop by an estimated €1 trillion in enterprise value as a result of the pandemic, with the aviation sector being the most affected, according to the Brand Finance Global 500 2020 report.

Value

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market.

Likely impact

Brand Finance measured March 2020 enterprise value compared to January figures and estimated the likely impact on brand value for each sector.

Each sector has been classified into three categories – limited impact (0% brand-value loss), moderate impact (up to 10% brand-value loss), and heavily impacted (up to 20% brand-value loss).

The COVID-19 impact analysis shows that the top 25 most valuable Irish brands could potentially lose up to 14% of brand value cumulatively, equal to a drop in total brand value from €20.4 billion to €17.5 billion. 

Ireland’s most valuable

And Penneys/Primark has knocked long-standing leader Guinness off the top spot to claim the title of Ireland’s most valuable brand.

Penneys/Primark has climbed two spots in the ranking after recording a 9% rise in brand value to €2.4 billion.

The budget clothing giant, which celebrated 50 years in business in 2019, has overtaken Allied Irish Banks (AIB) to take second position (brand value is down 18% to €1.9 billion) and long-standing leader, Guinness (down 24% to €1.9 billion).

Penneys/Primark continued to defy the high street’s gloomy slowdown with strong sales performances and consistent store openings throughout the year.

The brand now boasts 370 stores, across 12 countries, including its biggest store to date in Birmingham, England, employing 1,000 people.

Store closures

As of this month, however, Penneys/Primark has been forced to close all its stores globally, suppliers have been warned that no new orders will be processed, and executive-staff pay has been cut by up to 50%.

Store closures are expected to equate to a €705 million monthly loss in net sales.

Simon Haigh (managing director, Brand Finance Ireland), commented: “Only time will tell whether the retailer can hold on to this position in the long-term, however, following unprecedented times.

“Despite having managed their way through the three-and-a-half years of protracted Brexit uncertainty, the leading Irish brands are now facing even more uncertainty in 2020.

Food brand impact

“It is anticipated that there will be a limited impact from the COVID-19 pandemic on the food-brand owners, Glanbia and Kerry Group, in this year’s top 25 ranking, but the banking (AIB, Bank of Ireland, Ulster Bank), apparel (Penneys/Primark), and aviation (Aer Lingus and Ryanair) brands face a challenging year ahead.”

Irish banking brands have not fared well this year, as all three in the ranking record have decreased in brand value, with AIB and Bank of Ireland – down 14% to €1.2 billion – the third and fourth fastest-falling brands, respectively.

AIB continues to negotiate the mortgage overcharging scandal, and plans to cut 1,500 jobs by 2022.

Solid year

Irish food brands dominate the ranking, with six names featuring.

Glanbia-owned brands thinkThin (down 5% to €330 million), Optimum Nutrition (up 2% to €435 million) and BSN (up 6% to €225 million) have, on the whole, posted a solid year.

Combined value

With a combined brand value of €991 million, if Glanbia brands were consolidated, they would inch into the top ten.

Kerry Group (up 16% to €634 million) has two sub-brands in the ranking – Denny (down 4% to €145 million) and new entrant Richmond (brand value €134 million).

The food sector falls within the low-impact bracket, therefore, both Glanbia’s and Kerry Group’s brands should be somewhat shielded in the coming year compared with their fellow Irish brands.

Criteria

According to the survey criteria, Baileys is Ireland’s strongest brand, and also claimed the title of the fastest-growing brand, recording 115% brand-value growth to €1.2 billion.

However, Baileys’ parent company, global drinks company Diageo, has already warned of a significant sales hit, estimated at just over €200 million, as the brand suffers with bar and pub closures, as well as travel restrictions, which are significantly impacting on airport shopping sales.

 

Gazette Desk
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