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ICSC ďťż

European Outlet Conference

Meeting the Needs of the Outlet Customer 5th March 2014 Hilton Hotel - Wembley, London, United Kingdom


ICSC

European Outlet Conference

European Market – 2014 Update Kenneth Sinclair Gunn FSP Retail Business Consultants


Contents European Outlet Centres Today • • •

Current position Recent Expansion Historic Development Activity and Current Capacity

European Occupiers Today • • •

Top 25 Occupiers Expanding Occupiers Evolving Markets

Looking Ahead • • •

Planned 2014 & 2015 developments Historic Trend Capacity

Meeting the Needs of the Outlet Customer Conclusions


Current Position •

193 outlet centres1 >3k m2

Total GLA 3.3million m2

Turnover of €10.8bn

184 are over 5,000m²

155 are over 10,000m²

66 are over 20,000m²

Excluding Russia, 70% of the European population (controlling 73% of total purchasing power) lives within 90 minutes’ drive of an outlet centre http://www.fspretail.com/en/demo/interactive-outlet-centre-map/ Source: FSP 1

Turkey is considered to be separate from the core European market, and is not included in this review


Openings in 2013 Country

Location

Name

Year

GLA (sqm)

Format

FSP Type

United Kingdom Croydon

Croydon Village Outlet

2013

39,400 Department Store Large - Midscale

Ukraine

Kiev

Manufactura Kiev Outlet Village

2013

25,000 Outlet Village

Large - Midscale

France

Paris

One Nation Paris

2013

20,000 Outlet Mall

Medium - Upscale

Russia

Moscow

Fashion House Moscow

2013

15,724 Outlet Mall

Large - Midscale

United Kingdom London

London Designer Outlet

2013

16,000 Outlet Mall

Medium - Midscale

Russia

Moscow

Vnukovo Outlet Village

2013

26,252 Outlet Village

Large - Upscale

Poland

Warsaw

Factory Annopol

2013

19,700 Outlet Mall

Large - Midscale

Slovakia

Bratislava

One Fashion Outlet

2013

15,000 Outlet Village

Medium - Midscale

Source: FSP


Historic Expansion 350000

Floorspace Added (m²)

300000 250000

200000 150000 100000 50000 0

C. E. Europe

Northern Europe

Southern Europe

Western Europe Source: FSP


Current Position – Development Capacity

Source: FSP


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European Outlet Conference

The Occupier Market


Top FISHOccupiers Classification Fashionable – Demonstrates fashionability

Individual – demonstrates taste beyond transitory fashion

Safe – ‘value for money’ merchandise with good enough performance

Homely – Items are bought purely for replacement. Price is important for goods whose main attribute is utility

Young – peer pressure to conform is strong and fashion is a powerful identifying statement Assured– able to make up own mind and sophisticated in choice

Family – dominated by the financial considerations of running the home and caring for the family Classic – typically Post-Family. Many similarities with Assured but less self confidence about the ‘rightness’ of purchase decisions

Old – ‘given up’. Not seeking to make a statement about themselves through their purchases Source: FSP


Top Occupiers 25 Occupiers Retailer Nike Levi Strauss & Co Puma Adidas Calvin Klein Desigual Lacoste Tommy Hilfiger Home & Cook Tom Tailor Lindt Samsonite Guess Calvin Klein Underwear Gant Hugo Boss Geox Clarks Reebok Timberland Le Creuset Triumph Mango Benetton Villeroy & Boch

Country of Origin

Merchandise Category

USA USA Germany Germany USA Spain France USA France Germany Switzerland USA USA USA USA Germany Italy United Kingdom United Kingdom USA France Germany Spain Italy Germany

Leisure Clothing and footwear Leisure Leisure Clothing and footwear Clothing and footwear Clothing and footwear Clothing and footwear Household Clothing and footwear Catering Personal Clothing and footwear Clothing and footwear Clothing and footwear Clothing and footwear Clothing and footwear Clothing and footwear Leisure Clothing and footwear Household Clothing and footwear Clothing and footwear Clothing and footwear Household

FISH

Price Position

# Outlet Stores

CE. Europe

Northern Europe

Southern Europe

Western Europe

YI AS AS AS AF YI FS AI

Upper Middle Middle Middle Middle Upper Middle Upper Middle Upper Middle Upper Middle Middle Upper Middle Upper Middle Upper Middle Upper Middle Upper Middle Upper Middle Luxury Upper Middle Middle Middle Upper Middle Upper Middle Middle Middle Middle Upper Middle

114 105 77 74 69 62 60 60 56 54 52 52 50 49 47 46 45 44 44 44 43 42 41 41 40

19 16 19 21 2 4 12 14 7 15 4 7 5 1 9 1 7 0 14 4 3 11 13 11 5

31 17 7 16 7 0 12 11 8 1 6 10 3 12 4 10 0 27 7 10 16 4 1 1 12

39 34 29 21 35 31 15 16 18 4 23 17 21 18 13 13 20 7 14 19 3 9 17 22 6

25 38 22 16 25 27 21 19 23 34 19 18 21 18 21 22 18 10 9 11 21 18 10 7 17

FS

AF AF AI AI AI FS AS AI FS AI AS

Source: FSP


Top Occupiers 25 Expanding Occupiers Retailer

Country of Origin

Merchandise Category

FISH Price Position

# Outlet # New Outlet CE. Stores Stores Europe

Northern Europe

Southern Europe

Western Europe

Levi's

USA

Clothing and footwear

AS

Middle

105

20

4

1

7

8

Sunglass Hut

Italy

Personal

AI

Premium

18

17

0

7

9

1

Asics

Japan

Leisure

AI

Middle

39

16

1

6

4

5

Geox

Italy

Clothing and footwear

AI

Upper Middle

45

14

2

0

7

5

Puma

Germany

Leisure

AS

Middle

77

12

3

2

2

5

Lacoste

France

Clothing and footwear

FS

Upper Middle

60

12

6

3

2

1

Villeroy & Boch

Germany

Household

CI

Upper Middle

40

12

1

7

1

3

Crocs

USA

Clothing and footwear

FS

Middle

23

12

1

4

5

2

Fossil

USA

Personal

AI

Middle

28

12

0

6

2

4

Adidas

Germany

Leisure

AS

Middle

74

11

5

3

2

1

Guess

USA

Clothing and footwear

AF

Upper Middle

50

11

3

1

2

5

Swarovski

Austria

Personal

AS

Upper Middle

19

11

0

3

3

5

Desigual

Spain

Clothing and footwear

YI

Upper Middle

62

10

1

0

5

4

The Body Shop

United Kingdom Personal

FS

Middle

26

10

0

5

1

4

Lindt

Switzerland

Catering

Upper Middle

52

10

1

4

1

4

Mustang

Germany

Clothing and footwear

Middle

32

10

7

0

1

2

Samsonite

USA

Personal

Upper Middle

52

10

4

1

2

3

Quiksilver

USA

Clothing and footwear

YI

Middle

35

9

5

0

1

3

Harmont & Blaine Italy

Clothing and footwear

CI

Premium

17

9

0

0

9

0

AI

Source: FSP


Top Occupiers Expanding Occupiers in Key Markets

Rank

France

Germany

Italy

Poland

Spain

United Kingdom

1

Nydel (+5)

Watch Station (+5)

Harmont & Blaine (+9)

Brugi (+7)

Sunglass Hut (+8)

Gift Company, The (+8)

2

Geox (+4)

Esprit (+3)

Geox (+6)

Hi-tec (+6)

Flamenco (+4)

Sunglass Hut (+7)

3

Izac (+4)

Guess (+3)

Yamamay (+6)

Scotfree (+6)

Asics (+3)

Villeroy & Boch (+7)

4

Acanthe (+3)

Cecil (+3)

Michael Kors (+5)

Tom Tailor (+4)

Crocs (+3)

Blue inc (+7)

5

Desigual (+3)

Levi's (+2)

Alcott (+5)

Albione (+4)

Burger King (+3)

Asics (+6)

6

Devianne (+3)

Fossil (+2)

Brums (+5)

Mustang (+3)

Simone Perele (+3)

Fossil (+6)

7

Levi's (+3)

Napapijri (+2)

Primigi (+5)

Quiksilver (+3)

Belros (+3)

Radley (+6)

8

Little Marcel (+3)

Asics (+2)

Levi's (+4)

Tommy Hilfiger (+3)

Forecast (+3)

Viners (+6)

9

Mariner (+3)

Puma (+2)

Bottega del Sarto (+4)

Filippo (+3)

Xti (+3)

Body Shop (The) (+5)

10

Aigle (+2)

Seidensticker (+2)

Camomilla (+4)

Regatta (+3)

Levi's (+2)

Bellissimo (+5)

Source: FSP


Top Occupiers Evolving Fashion Markets FISH Lifestage Index

Price Position Index

(100 = Existing Regional Provision) 40

60

80

100

120

140

(100 = Existing Regional Provision) 160

50

70

90

110

130

150

170

190

Young Luxury / Premium

Assured

Upper Middle

Family

Middle Classic

C.E. Europe

Northern Europe

Southern Europe

Western Europe

C.E. Europe

Northern Europe

Southern Europe

Western Europe Source: FSP


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European Outlet Conference

Looking Ahead


Planned 2014 / 2015 Openings Country

Location

Name

Year

GLA (sqm)

Denmark

Copenhagen

Copenhagen Designer Outlets

2014

17,500

Germany

Bad Munstereifel

Eifel City Outlet

2014

12,000

Italy

Brugnato

Shoppinn Brugnato

2014

22,000

Poland

Lublin

City Outlet Lublin

2014

11,500

Czech Republic

Stříbro

Bohemia Village

2015

16,000

Denmark

Billund

Billund Quality Outlets

2015

20,000

France

La Cavalerie

Viaduc Village

2015

5,988

Germany

Leipzig

Fashion Outlet Leipzig

2015

17,500

Germany

Koblenz

Montabaur Fashion Outlet

2015

14,500

Poland

Bialystok

City Outlet Bialystok

2015

14,500

Russia

St Petersburg

Outlet Village Pulkovo

2015

25,000

Russia

St Petersburg

Fashion House St Petersburg

2015

20,260

Russia

Yekaterinburg

Fashion House Yekaterinburg

2015

18,000

Spain

Barcelona

Viladecans The Style Outlets

2015

25,000

United Kingdom

Solihull

Resorts World at the NEC

2015

14,362 Source: FSP


Future Position – Development Capacity

Opening 2014/15 Source: FSP


Planned Expansion 350000

Floorspace Added (m²)

300000 250000 200000 150000 100000 50000 0

C. E. Europe

Northern Europe

Southern Europe

Western Europe

Source: FSP


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European Outlet Conference

Meeting the Needs of the Outlet Customer


Satisfied Customers Reward Outlet Centres • •

Survey research at 4 Outlet Centres across Europe Promoters and Detractors defined using response to Net Promoter Score question

Annual % Visit Respondents Frequency

FOC

Average Spend Per Visit €

A

Promoters Detractors Potential Uplift

50% 11%

15 9 73%

68 49 40%

B

Promoters Detractors Potential Uplift

15% 26%

7 6 16%

117 93 26%

C

Promoters Detractors Potential Uplift

36% 27%

8 4 77%

70 47 49%

D

Promoters Detractors Potential Uplift

21% 10%

5 3 43%

163 120 36%

Sites B and C under perform

Site D has low proportions of Detractors but converting more visitors to Promoters would bring huge benefits Across all 4 sites, changes which convert visitors from Detractors to Promoters would increase visits by 50% and average spend by 40%

Source: FSP


Meeting the Needs of the Outlet Customer • Success is determined by how well we meet the needs of customers • Promoters visit more often and spend more per visit than Detractors • Opportunities exist to increase sales by 25% to 50% at most outlet centres. This makes the sector attractive to new investors • Growing outlet provision, on-line shopping and discount high streets mean that in 2014/15 consumers have greater choice than ever • It is important that outlet centres maintain their competitive advantage by going beyond and not just simply meeting the needs of customers • This is about integrating good design, marketing, leasing and operational activity to focus on the complete customer experience • The best performing outlet centres in the next 24 months will be those which recognise this and deliver a ‘great day out’ visitor package • Every outlet location is unique, so if you want to know how to create the ideal visitor package, why not ask the customer?


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European Outlet Conference

Conclusions


Conclusions • 2013 was another strong year for European Outlet Centres • Development activity continues to infill gaps in the outlet map and to challenge conventions on what is a sustainable level of provision • There are over 200 trading outlet centres in Europe which encompass a variety of formats, price positions and locations • Current development activity is focused in Germany, Central and Eastern Europe. Elsewhere, there are opportunities to infill under developed regions including the UK (Midlands/SE), France (Lyons, Provence) and Spain (Catalonia) • There is scope for further development of 50 and 75 new outlet centres suggesting that the pace of growth will continue for years to come • As the map fills and competition strengthens, we need to go beyond meeting the needs of customers and exceed their expectations • An insight based, integrated approach is now essential for success

European Market – 2014 Update  

Presentation reviewing recent trends in the expansion of Outlet Centres and exploring what this expansion means in terms of occupier trends.

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