This week George Weston, CEO of Associated British Foods, proudly reported that the sales of one of its most famous subsidiaries, Primark, had grown by 22% in the year to 14 September. Impressive figures for any company, let alone one that has had a very public scandal this year.
This particular scandal took place a little further afield, in Bangladesh. On 24 April, 1,131 people tragically lost their lives in the collapse of an eight story garment factory, that manufactures Primark apparel.
The incident stirred local and global furor, making both initial headlines and then continued to receive substantial media attention. It was considered by many as the worst clothing industry crisis for years.
How were Primark sales affected in the aftermath of this crisis? 13 new stores are planned before Christmas and customers are still flooding through the doors. A significant portion of this resilience was deemed to be down to strategic and well-executed PR.
Primark quickly publicised their hands-on response to the crisis; sound-bites were generated; on-the-ground insights were circulated alongside stories of heroic recovery and personal triumph. More importantly, Primark choose not to communicate a defensive message and deny association to the factory, unlike members of their peer group, Mango and Benetton. Instead, they acknowledged that their products were manufactured in the building, and even agreed to pay compensation.
Both Primark’s response and the communication of it were regarded favourably. This has been reiterated by the recently published strong financial results, demonstrating the power of effective crisis communications.
Primark’s results have however reignited the argument as to whether companies who choose the cheap option of manufacturing in the developing world, are doing so irresponsibly. Whether this cynicism has the capacity to filter down to affect consumer behaviour is yet to be seen, but the sustainability of Primark’s profits is, at a minimum, called into question. How many times can PRs save face with effective crisis communications until stakeholders get fed up and stop buying?
If PRs can encourage and then communicate the ethically sound operations of their clients, long term profitability will ultimately come from honesty and transparency. There won't be anything scandalous about it.
Abchaps attended some brilliant events this week, including Allenby Capital's corporate rugby at Twickenham, where England ruled Britannia, and an event hosted by Olswang and the Malaysia Multimedia Development Corporation about business development in Asia.
We also treated some city friends to corporate hospitality at the Chelsea v Shalke 04 match on Wednesday, where the blues won 3-0. And our graduate Abchaps also underwent some excellent training at Finance Talking this week, learning finance essentials for communicators.
Our friends over at Crowe Clark Whitehill have strengthened their Midlands office with the appointment of Rob Gunn as a partner, specialising in corporate tax. Imilarly, Investec Wealth & Investment bolsters its regional office expertise in their Glasgow office with new investment directors David Kerr and Lisa Brown of Barclays.
Finally Ruth Crowell leaves law firm Norton Rose to become the Chief Executive of the trade association London Bullion Market Association on 1 January 2014.
Central London is being closed off this Saturday for the 2013 Lord Mayor’s Show. Starting at 8:30am, the Lord Mayor boards QRB Gloriana and along with a spectacular Flotilla makes his way from Westminster to Tower Bridge. Then at 11am, Mansion House, the 3.5 mile modern procession commences, wrapping with an elaborate Fireworks display at 5pm at Waterloo, officially confirming the beginning of the new mayoral year.
It’s officially Christmas folks – Regent Street, Covent Garden and Duke of York Square are illuminating their streets with snowflakes, reindeer and all things sparkly this Saturday night. Festive fireworks, carols and Christmas cheer will be supplied by top artists such as Leona Lewis, Eliza Doolittle and Emma Bunton.
For something a little less seasonal, head down to the Truman Brewery for some culinary art education at the 4th annual Experimental Food Society Spectacular. Displays by Britain’s most talented and pioneering gourmet artists will create awe-inspring assemblages of butter sculptors, food furturologists and experimental confectioners.
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