Outlets: seizing opportunities for growth

BY CAROLINE LAMY

2014 was the quietest year for new outlet centers since 1996 and hence Magdus & FSP explained in the first presentations how healthy the outlet industry was in 2015 and which growth opportunities existed in the European outlet industry. Magdus reported that more than 415 outlet centers existed in the world, half of them located in Europe. There were one hundred outlet projects in Europe but a large part of them was delayed or cancelled due to the economic crisis. Nevertheless, the major European outlet developers were still working on new schemes, like McArthurGlen (Miramas in France) and Neinver (Viladecans in Spain). Some developers also focused on expanding their existing centers, such as Ashord in the UK.

FSP reviewed the latest occupier, investment and sales trends and identified opportunities for growth in 2015 and beyond. With digital media creating globally aware consumers and operators craving “new blood” to refresh tired centers, internationalization remained an underexploited opportunity for brands. FSP compared customer demand, brand coverage and outlet performance in the largest European markets with the aim of encouraging greater convergence, better investment decisions and future industry growth.

According to Coniq, center-wide loyalty schemes – being one of the latest trends in retail real estate – unquestionably had huge advantages for a shopping center, from brand building to increased shopper insight and overall customer experience. Coniq explained how individual retailers profited within a center and which benefits and risks were involved in a program that included their competitors. This session looked at shopper engagement from a retailer perspective across 19 shopping centers, comparing both outlet and full price programs throughout across Europe.

A workshop devoted to retailers focused on outlet development strategies and forecasts as well as on new retailer challenges in the outlet market. The success of outlet centers was strongly based on retailers who were already present in the outlet industry but also on those who changed their minds on this underestimated sector and recently entered it. Lacoste & L’Oréal shared their vision of the European outlet market. They presented their development strategies and forecasts for the outlet sector as well as their specific challenges in this field. While Lacoste – one of the first brands to open outlet stores in Europe in the 1980s – had no strong development strategy in the European outlet market, L’Oréal – a new player in the outlet industry – had opened 14 stores in Western Europe since the launch of the first shop in Italy in 2013. It was interesting to note that the company developed its outlet strategy to avoid destroying obsolete beauty products.

The future of the European outlet market seems promising for all the players (developers, investors, retailers, service providers). Nevertheless, they will have to pay attention to some recent changes or changes to come, for example legal reforms like in France that adopted several laws significantly modifying business license requirements and business leases in the past twelve months. Those changes will have a major impact on outlet projects and especially on budget buildings.

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