outlet centre research | 2014 | retail consultancy
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What is the key to success for outlet centres? Find out more in Ken's presentationTRANSCRIPT
FSP RETAIL BUSINESS CONSULTANTS
Occupiers: Selling the Future Kenneth S. Gunn, FSP Retail Business Consultants
Occupiers: Selling the Future European Outlet Centres – Current Position
Recent developments
European Occupiers Today
Looking Ahead
Planned 2014 & 2015 developments
Improving Location Decision Making
Conclusions
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 2
Current Position
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 3
1 Turkey is considered to be separate from the core European market, and is not included in this review
http://www.fspretail.com/en/demo/interactive-outlet-centre-map/
194 Outlet Centres1 >3,000m² Total GLA 3.3million m² Turnover of €10.8bn 185 are over 5,000m² 156 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
Source: FSP
Openings in 2013
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 4
Country Location Name Year GLA (sqm) Format
United Kingdom Croydon Croydon Village Outlet 2013 39,400 Department Store
Ukraine Kiev Manufactura Kiev 2013 25,000 Outlet Village
France Paris One Nation Paris 2013 20,000 Outlet Mall
Russia Moscow Fashion House Moscow 2013 15,724 Outlet Mall
United Kingdom London London Designer Outlet 2013 16,000 Outlet Mall
Russia Moscow Vnukovo Outlet Village 2013 26,252 Outlet Village
Poland Warsaw Factory Annopol 2013 19,700 Outlet Mall
Slovakia Bratislava One Fashion Outlet 2013 15,000 Outlet Village
Spain La Jonquera Gran Jonquera Outlet & Shopping 2013 12,000 Outlet Mall
Source: FSP
Historic Expansion
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 5
0
50000
100000
150000
200000
250000
300000
350000
Floo
rspa
ce A
dded
(m²)
C. E. Europe Northern Europe Southern Europe Western Europe
Source: FSP
Current Position – Development Capacity
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 6
Source: FSP
FSP RETAIL BUSINESS CONSULTANTS
The Occupier Market
FISH: FSP’s Classification of Fashion Brands
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 8
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
8% 6% 3%
9% 26% 12%
1% 21%
6% 6%
1%
8% Source: FSP Indicates the percentage split of all European Outlet Centre fashion brands in each FISH Segment
Top 25 Occupiers by Portfolio
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 9
Retailer Country of Origin
Merchandise Category FISH Price Position # Outlet
Stores CE.
Europe Northern Europe
Southern Europe
Western Europe
Nike USA Leisure YI Upper Middle 114 19 31 39 25 Levi Strauss & Co USA Clothing & Footwear AS Middle 105 16 17 34 38 Puma Germany Leisure AS Middle 77 19 7 29 22 Adidas Germany Leisure AS Middle 74 21 16 21 16 Calvin Klein USA Clothing & Footwear AF Upper Middle 69 2 7 35 25 Desigual Spain Clothing & Footwear YI Upper Middle 62 4 0 31 27 Lacoste France Clothing & Footwear FS Upper Middle 60 12 12 15 21 Tommy Hilfiger USA Clothing & Footwear AI Upper Middle 60 14 11 16 19 Home & Cook France Household Middle 56 7 8 18 23 Tom Tailor Germany Clothing & Footwear FS Upper Middle 54 15 1 4 34 Lindt Switzerland Catering Upper Middle 52 4 6 23 19 Samsonite USA Personal Upper Middle 52 7 10 17 18 Guess USA Clothing & Footwear AF Upper Middle 50 5 3 21 21 Calvin Klein Underwear USA Clothing & Footwear AF Upper Middle 49 1 12 18 18 Gant USA Clothing & Footwear AI Upper Middle 47 9 4 13 21 Hugo Boss Germany Clothing & Footwear AI Luxury 46 1 10 13 22 Geox Italy Clothing & Footwear AI Upper Middle 45 7 0 20 18
Clarks UK Clothing & Footwear FS Middle 44 0 27 7 10
Reebok UK Leisure AS Middle 44 14 7 14 9 Timberland USA Clothing & Footwear AI Upper Middle 44 4 10 19 11 Le Creuset France Household Upper Middle 43 3 16 3 21 Triumph Germany Clothing & Footwear FS Middle 42 11 4 9 18 Mango Spain Clothing & Footwear AI Middle 41 13 1 17 10 Benetton Italy Clothing & Footwear AS Middle 41 11 1 22 7 Villeroy & Boch Germany Household Upper Middle 40 5 12 6 17
Source: FSP
Top 25 Expanding Occupiers
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 10
Retailer Country of Origin
Merchandise Category FISH Price
Position # Outlet Stores
# New Outlet Stores
CE. Europe
Northern Europe
Southern Europe
Western Europe
Levi's USA Clothing & 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 & Footwear AI Upper Middle 45 14 2 0 7 5 Puma Germany Leisure AS Middle 77 12 3 2 2 5 Lacoste France Clothing & 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 & 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 & 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 & Footwear YI Upper Middle 62 10 1 0 5 4 The Body Shop UK Personal FS Middle 26 10 0 5 1 4 Lindt Switzerland Catering Upper Middle 52 10 1 4 1 4 Mustang Germany Clothing & Footwear AI Middle 32 10 7 0 1 2 Samsonite USA Personal AS Upper Middle 52 10 4 1 2 3 Quiksilver USA Clothing & Footwear YI Middle 35 9 5 0 1 3 Harmont & Blaine Italy Clothing & Footwear CI Premium 17 9 0 0 9 0 Salomon France Leisure FS Upper Middle 22 9 5 0 0 4 Tommy Hilfiger USA Clothing & Footwear AI Upper Middle 60 9 6 1 1 1 Superdry UK Clothing & Footwear YF Middle 24 9 0 4 1 4 Nike USA Leisure YI Upper Middle 114 8 4 0 3 1 Tom Tailor Germany Clothing & Footwear FS Upper Middle 54 8 5 0 0 3 Triumph Germany Clothing & Footwear FS Middle 42 8 3 0 1 4
Source: FSP
Top Expanding Occupiers in Key Markets
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 11
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)
(+) Indicates the number of new stores Source: FSP
Evolving Fashion Markets
FSP RETAIL BUSINESS CONSULTANTS April 7, 2014 12
40 60 80 100 120 140 160
Young
Assured
Family
Classic
FISH Lifestage Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision) (100 = Existing Regional Provision)
40 60 80 100 120 140 160 180
Fashionable
Individual
Safe
FISH Attitudinal Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision)
Source: FSP
FSP RETAIL BUSINESS CONSULTANTS
Looking Ahead
Planned 2014 / 2015 Openings
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 14
Source: FSP
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 Barcelona The Style Outlets 2015 25,000
United Kingdom Solihull Resorts World at the NEC 2015 14,362
Planned Expansion
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 15
0
50000
100000
150000
200000
250000
300000
350000
Floo
rspa
ce A
dded
(m²)
C.E. Europe Northern Europe Southern Europe Western Europe
Source: FSP
Future Position – Development Capacity
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 16
Source: FSP
FSP RETAIL BUSINESS CONSULTANTS
Improving Location Decision Making
Improving Location Decision Making Success is determined by how well we as an industry meet the needs of our customers
Growing Outlet provision, on-line shopping and discount high streets mean that in 2014 consumers have greater choice than ever
Outlet increasingly has to perform profitably against other retail channels
Occupiers also have more choice than ever. Not only are more schemes opening and existing schemes expanding but there is also vacant space at existing Outlet Centres
For some brands, the high cost of occupancy at the best sites is becoming a constraint
With so much choice, it is increasingly difficult for occupiers to identify the best Outlet Centres, particularly amongst the 85% of European Outlet Centres not managed by the top two operators
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 18
Even Top Brands have Under Performing Outlets
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 19
Source: FSP
0%
5%
10%
15%
20%
25%
30%
35%
40%
Quartile 1: <=€1,850/sqm
Quartile 2: <=€2,500/sqm
Quartile 3: <=€3,500/sqm
Quartile 4: >€3,500/sqm
% O
utle
t Por
tfolio
Spl
it
European Outlet Centre Performance Quartiles
All Occupiers Top 60 Occupiers Top 30 Occupiers
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 20
Source: FSP
€0 €50
€100 €150 €200 €250 €300 €350 €400 €450 €500
0 5 10 15 20 25
Estim
ated
201
3 Tu
rnov
er
Mill
ions
Population within 90 minutes
Millions
Drive Times are not Reliable Indicators of Potential
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 21
Source: FSP
€0 €50
€100 €150 €200 €250 €300 €350 €400 €450 €500
0 10,000 20,000 30,000 40,000
Estim
ated
201
3 Tu
rnov
er
Mill
ions
Gross Area (m2)
C.E Europe Northern Europe Southern Europe Western Europe Trendline
Performance Varies Within Regions
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 22
Source: FSP
€0 €50
€100 €150 €200 €250 €300 €350 €400 €450 €500
0 10,000 20,000 30,000 40,000
Estim
ated
201
3 Tu
rnov
er
Mill
ions
Gross Area (m2)
Outlet Village Outlet Mall Factory Outlet Other Trendline
Good Design is Increasingly Important
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 23
Source: FSP
€0
€50
€100
€150
€200
€250
€300
€350
€400
€450
€500
0 10 20 30 40
Estim
ated
201
3 Tu
rnov
er
Mill
ions
Count of Top 60 Occupiers (by Portfolio)
A Strong Brand Line Up Is Important
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 24
Source: FSP
€0 €50
€100 €150 €200 €250 €300 €350 €400 €450 €500
0 10,000 20,000 30,000 40,000
Estim
ated
201
3 Tu
rnov
er
Mill
ions
Gross Area (m2)
McArthurGlen / Value Retail Major Operators Others Trendline
It Is About More Than Just the Operator
FSP RETAIL BUSINESS CONSULTANTS
Conclusions
Conclusions 2013 was another strong year for European Outlet Centres
Development activity continues to infill gaps in the European 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, France and Spain
There is scope for further development of 50 to 75 new Outlet Centres suggesting that the pace of growth will continue for a number of years to come
2014 looks like a slightly slower year however, 2015 will see a return to trend
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 26
Conclusions As the outlet map of Europe fills and competition strengthens, the outlet industry must continue to exceed the expectations of customers, however;
Many Outlet Centres are underperforming
Without stronger management, a number of schemes will eventually fail
For some brands, the ‘high’ cost of occupancy at the best sites is a constraint
For many occupiers, it is increasingly challenging to identify the best schemes
FSP believes the key to achieving a sustainable future is better location decision making;
Operators, investors and developers need to be much clearer about the trading opportunity, strategic objectives and their future vision for growth, when promoting Outlet Centres
Occupiers should demand more than drive time statistics when selecting new sites
With improved decision making, many Outlet Centres would substantially increase sales and the entire industry would be more profitable and more resilient to future challenges
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 27
Conclusions With new schemes, extensions and vacant space, occupiers currently have greater choice of locations than ever
To determine the most suitable sites, occupiers need to incorporate greater insight. It is important to ask the right questions, request more detailed information and if necessary, seek independent advice
Looking forward, the most successful operators will be those who can use information effectively to prioritise trading opportunities and lease units to the most appropriate occupiers
The most successful occupiers will be those who recognise how to use the insight and expertise that is available today to reject inferior locations and prioritise the most appropriate, profitable trading opportunities for their brand
April 7, 2014 FSP RETAIL BUSINESS CONSULTANTS 28
FSP RETAIL BUSINESS CONSULTANTS
Merci pour l'écoute
FSP RETAIL BUSINESS CONSULTANTS 19 Manor Courtyard Hughenden Avenue High Wycombe UK, HP13 5RE
T +44(0)1494 474740 F +44(0)1494 474262 [email protected]
www.fspretail.co.uk www.snap-shop.co.uk
Ken Gunn Director T+44(0)1494 474740 M+44(0)7773 779919 F+44(0)1494 474262