How has the outlet market developed over the past 10 years?
The sector now focuses on designer outlets not factory outlets. This change has been brand- and consumer-led, as consumers love brands at discounted prices, and brands love new consumers. Also, outlets now have an authoritative position in what has now become an omni-channel world, the outlet channel is no longer seen as a poor relation or something to hide; more designer and premium brands are seeing the benefit of having an outlet channel as they see returns in cash, profit, new customers, and opportunities for stock liquidation.
What are your predictions regarding the future of outlets in Europe?
The future of the sector looks bright; the number of outlets continues to increase, especially in Germany. Central Europe continues to see new schemes such as The Prague Outlet and One Fashion Outlet, France is also seeing growth. In the UK, although the market is saturated, poor schemes are being replaced by new ones–including Mill Green, Cannock. A new trend has emerged whereby big operators, backed by serious investors are investing in existing schemes, remodelling and re-branding them and creating something new and exciting-McArthur Glen Berlin and Luxemburg Designer Outlet, Styles Outlets in Zweibrucken are examples worth mentioning. Just this year, Value Retail introduced a new model with Meyer Bergman to invest in existing schemes in capital city locations, Fashion Arena Prague and Batavia Stadt in Holland are among their examples. As an investment opportunity, the outlet sector is very attractive as returns are reliable.
What is your strategy with regards to Prague Outlet?
Our strategy is to deliver an upscale scheme to match the wealthy Prague catchment and to attract the many high spending tourists who already visit Prague as a shopping destination, particularly tourists from the Far East and Russia. We have a strong location, adjacent to Prague’s international airport in the wealthy part of the city. We have a quality scheme, which matches the profile of the designer and premium tenants we are attracting. We're delighted to be working on such an exciting project.
As you are currently overseeing a number of retail schemes across the UK and Europe, what retail trends would you say will dominate in the near future?
The industry will continue to attract more new tenants, as the world ‘grows smaller’ and brands enter new markets in search of additional turnover and profit; Brands from the States i.e. American Eagle, Victoria Secret, Coach, are all focusing on Europe at the moment. Upscale schemes run by quality operators will continue to dominate the sector. Brands have understood in recent years that it pays to focus on their outlet business, so they will continue to invest in better shop fits, so the whole sector will continue to move forward profitably.
In your opinion, which European outlet markets have been the most successful and why?
The UK and Italy have dominated and have been the most successful. The UK has delivered a large number of high performing schemes across the whole country, while Italy has focused on the luxury market within the sector and dominates here. France and Germany have been hampered by planning laws, but offer great growth potential now. Central Europe offers good potential for brands seeking new territories.
