ACROSS | The European Retail Real Estate Magazine

Opinion

RENOWNED GLOBAL FASHION BRANDS NO LONGER GUARANTEE SUCCESS

Arn Willems, GTC, Managing Director Croatia Image: GTC

Until recently, securing a renowned global fashion brand as a shopping mall anchor was often considered a guarantee for success. This was particularly the case in CEE, where many such retailers were just beginning to enter the market.

By Arn Willems

About a decade ago, we were able to secure the country’s first Zara store at one of our regional malls. Needless to say, it was one of their best performing stores in Europe for quite a while, and, at least to some extent, it guaranteed the success of the entire mall. However, this is no longer the case. Times are very different now – merely securing global fashion brands, while still important, is no longer sufficient.

We have been hearing about the changing retail environment for several years. This is a fact. We hear about it all the time. The digital age as well as e-commerce have created competition. Consumer habits are shifting. Sustainability issues and social responsibility are becoming increasingly important. Leisure and F&B are now crucial elements. However, key mall stakeholders, such as lenders and tenants, continue to focus on traditional anchors, in particular global fashion brands, giving little attention to the aforementioned factors.

This makes it very difficult for landlords to suitably adapt their malls to the current market. And, here is the contradiction – both landlords and tenants, as well as lenders and other stakeholders, want well-performing shopping-centers, but they are not all ready to embrace the changes that are required to ensure such performance. Strong fashion brands and other traditional anchors, by all means, remain an important part of the tenant mix; however, there are so many other factors that, at the very least, should be given increased consideration.

McKinsey has recently noted that “malls of the future will be less about in-store shopping and more about giving people in-person experiences they can’t get on their smartphones”. If that is the case, then surely, in addition to asking who the fashion anchors will be, prospective tenants should consider whether shopping centers have digital strategies. Has any research been carried out regarding the habits of the consumers within the catchment areas, and how are these habits changing? What is planned for the mall in terms of the food offering and leisure? Is the design attractive – not only externally/architecturally, but also with regard to the choice of material, width, natural light, shopfront design, sanitation facilities, etc.

Ada Mall GTC

Ada Mall, which is currently under construction in Belgrade and is due to open in Q1 2019. Image: GTC

All of these factors will increasingly impact the performance of shopping centers, which is why we are paying significant attention to each of them throughout the development of Ada Mall, which is currently under construction in Belgrade and is due to open in Q1 2019.

In an effort to create a pleasant indoor environment with wide corridors, a simple layout, and plenty of natural light, the gross leasable area has not been maximized. Throughout the design process, we considered all possible outdoor space options, which has resulted in three terrace levels, each with abundant greenery and each offering beautiful views of the city as well as Lake Ada. We have requested that the cinema operator do more than simply show movies. We are currently in discussions with numerous playground operators regarding the provision of a facility at which parents can leave their children in a supervised and educational environment.

Food service will be unique in that not only will the standard fast food offering be provided, but a selection of artisan food stands providing fresh gourmet dishes and fine dining restaurants will be offered as well. In brief, a real effort has been made to provide visitors with experiences that they will find quite difficult to get on their smartphones. This has been done via the shifting away of focus on traditional anchors, in particular large fashion brands, and the exploration of alternative options in order to be competitive in tomorrow’s ever-changing market.

 


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