ACROSS: What challenges is the European designer outlet industry facing in general in 2017?
HENRIK MADSEN: To answer this question, we have to look back at the events that have recently shaped the world. After all, at the risk of dramatic understatement, last year was an “interesting time.”
Brexit and its implementation, in particular, are having a massive effect on the European retail real estate market and therefore the designer outlet industry. This is because consumers, retailers, investors, operators etc. are trying their best to navigate through times that are uncertain in every regard.
Major incidents like those in Paris, Nice, Brussels, and Berlin have obviously made people nervous—which in turn also negatively affects footfall on the High Streets. Since designer outlets are usually outside cities, the industry is lucky not to have been affected by an associated drop in footfall so far.
Donald Trump’s rise to the US presidency also cannot be ignored. It is too early to say how that political event will affect our business. The elections and the government formation in the Netherlands, France, and Germany will also affect us. Nevertheless, we see an industry that is in good shape overall.
ACROSS: In which European countries do you still see potential for designer outlets? Which markets are saturated?
MADSEN: If you look at GLA per 1,000 inhabitants, the UK and Italy could be considered saturated. By contrast, there is still tremendous potential in France, Germany, and parts of Spain.
ACROSS: As far as McArthurGlen goes, what goals are currently priorities for the company?
MADSEN: We want to continue to strengthen our consumer-centric approach. We are on the right track in that regard. We’re in the process to establish the best possible digital engagement with our customers, a key component to the McArthurGlen’s support this strategy.
We want not only to meet our visitors’ expectations in terms of services, entertainment, but to far exceed these to ensure we receive recommendations to attract new visitors and nurture revisits.
ACROSS: What projects are you focusing on in Europe in 2017?
MADSEN: Quite a lot is going on. We recently opened extensions to our designer outlets in Neumünster near Hamburg, Venice, and a new phase will be added to our very successful Roermond designer outlet. In addition, we are about to complete the purchase of Rosada Fashion Outlet in Roosendaal in the Netherlands from Resolution Property. Rosada adds a center with 23,000 sq m of GLA to our portfolio.
In addition we opened an outlet in Miramas in the French Provence on April 13. That center is a milestone for McArthurGlen. The same is true for our project in Málaga, on which construction will begin later this summer. The opening is planned for 2018. It will be our first McArthurGlen center in Spain.
ACROSS: There was recently cause for celebration in Parndorf, Austria, as well, right?
MADSEN: Yes, we were able to open an extension to our local outlet there on April 11. Customers can look forward to an additional 5,500 sq m of new stores featuring international brands like Peak Performance, Under Armour, Christ, Wiesenkönig, Birkenstock, and Patrizia Pepe. Our location in Parndorf thus now houses more than 160 stores on around 36,500 sq m.
ACROSS: Here the question arises of how important food and beverage is in designer outlets.
MADSEN: The increasing importance of the gastronomic offer is one of the most significant changes that have swept through the shopping center industry in the past few years. Entertainment facilities have also become increasingly important.
This tendency has long since spilled over onto designer outlets. We are just reshaping our entire food and beverage offer in all our locations. After all, customers often want to round out their purchases with a glass of champagne or a fine meal. The gastronomy offer is a win or lose issue.
ACROSS: There is a slight trend towards designer outlets in downtown locations. Would that be an option for McArthurGlen?
MADSEN: It’s all about opportunity for us. I detect only a very slight trend toward downtown locations, however. Our concept, which serves us well, is locations just outside cities.
ACROSS: Many players want to get away from the “factory sell-off” image that the industry has long had. What is your opinion on this?
MADSEN: Designer outlets nowadays really do offer many more options than they did initially. It is no longer just about what’s on the shelves in the shops—at reduced “outlet store prices.”
Thanks to the customer-centered approach we follow, we meet and exceed visitors’ expectations in several ways, for example in terms of our centers’ architecture, the overall service proposition. It is only right that we should want to shake off that old image.