1. June 11, 2015
FSP RETAIL BUSINESS CONSULTANTS
How Healthy is the Outlet Centre Industry?
Kenneth Sinclair Gunn
Director, FSP Retail Business Consultants
2. Contents
European Outlet Centres Today
Current Position
Recent Expansion
Planned 2015 & 2016 developments
Development Cycle and Current Capacity
European Occupiers Today
Top 25 Occupiers
Expanding Occupiers
Evolving Markets
Consumer Feedback
International Brands
Communication
Conclusions
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS2
3. Current Position
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS3
Source: FSP
201 outlet centres1 >3k m2
Total GLA 3.4million m2
2014 Turnover of €11.7bn
191 are over 5,000m²
161 are over 10,000m²
63 are over 20,000m²
Excluding Russia, 72% of
the European population
lives within 90 minutes’
drive of an outlet centre
http://www.fspretail.com/en/demo/interactive-outlet-centre-map/
1 Turkey is considered to be separate from the core European market, and is not included in this review
4. McArthurGlen:
23%
Value Retail:
15%
Neinver: 8%
Realm: 4%
Marques Ave.:
4%
Promos: 3%
Freeport: 2%
Fashion Hse.:
2%
Fashion Dist.:
1%
Advantail: 2%
Others: 37%
Operators & Investors
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS4
Source: FSP
Share of Total Turnover
TH Real Estate:
18%
Value Retail &
Ptnrs: 14%
IRUS: 7%
McArthurGlen &
Ptnrs: 4%
VIA Outlets: 3%
Blackstone: 3%
Hermes: 3%
Resolution: 3%
AEW: 3%
Unibail
Rodamco: 2%
Others: 40%
5. Outlet Centre Openings in 2014
Country Location Name Format Location Format GLA (m2)
Italy Brugnato Shopinn Brugnato Outlet Village Edge of Suburbs Medium - Upscale 22,000
Denmark Copenhagen Copenhagen DO Outlet Mall Suburban Location Medium - Midscale 17,500
Poland Lublin City Outlet Lublin Outlet Mall Edge of Suburbs Medium - Midscale 12,500
Germany Bad Munstereifel Eifel City Outlet Outlet Village Town Centre Medium - Midscale 12,000
United Kingdom London - Hackney Hackney Fashion Hub High Street Edge of Town Centre Small - Upscale 7,000
Netherlands Amsterdam UFO Akerpoort Department Store Suburban Location Minor - Midscale 5,000
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS5
Source: FSP
6. Planned Openings in 2015 & 2016
Country Location Name Year GLA (sqm)
Poland Bialystok City Outlet Bialystok 2015 13,000
Denmark Billund Billund Quality Outlets 2015 12,000
Germany Brehna Fashion Outlet Leipzig 2015 11,500
Germany Koblenz Montabaur Fashion Outlet 2015 14,500
France La Cavalerie Viaduc Village 2015 5,988
France Paris (Aubergenville) Marques Avenue A13 2015 12,900
Czech Republic Prague The Prague Outlet 2015 12,000
United Kingdom Solihull Resorts World at the NEC 2015 14,362
Russia St Petersburg Outlet Village Pulkovo 2015 13,024
Italy Torino Torino Outlet Village 2015 19,500
Spain Barcelona (Viladecans) Viladecans The Style Outlets 2016 19,800
Italy Bergamo San Pellegrino Outlet Village 2016 13,000
France Marseille (Miramas) McArthurGlen Provence 2016 16,000
Russia St Petersburg Fashion House St Petersburg 2016 13,000
Estonia Tallinn Gate Tallinn Outlet 2016 12,500
Finland Vaalimaa Zsar Outlet Village 2016 12,000
Russia Yekaterinburg Fashion House Yekaterinburg 2016 18,000
Czech Republic Zdice Bohemia Outlet Village 2016 16,000
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS6
Source: FSP
7. Outlet Industry Expansion
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS7
Source: FSP
0
50000
100000
150000
200000
250000
300000
350000
FloorspaceAdded(m²)
Central Europe Northern Europe Southern Europe Western Europe
8. Capacity for New Outlet Development
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS8
Source: FSP
10. The Occupier Market
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS10
Source: FSP
0
100
200
300
400
500
600
700
800
900
1,000
-10%
0%
10%
20%
30%
40%
CountofOcupiers
%Change2015vs.2014
2015 Change 2015 vs. 2014
11. Top 25 Occupiers
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 120 20 29 43 28
Levi Strauss & Co USA Clothing & Footwear AS Middle 112 16 18 37 41
Puma Germany Leisure AS Middle 75 20 3 28 24
Adidas Germany Leisure AS Middle 74 21 14 21 18
Tommy Hilfiger USA Clothing & Footwear AI Upper Middle 71 16 13 22 20
Desigual Spain Clothing & Footwear YI Upper Middle 68 4 1 32 31
Guess USA Clothing & footwear AF Upper Middle 62 11 4 26 21
Tom Tailor Germany Clothing & Footwear FS Upper Middle 62 19 1 4 38
Lacoste France Clothing & Footwear FS Upper Middle 61 8 12 18 23
Calvin Klein USA Clothing & Footwear AF Upper Middle 58 3 8 31 19
Lindt Switzerland Catering Upper Middle 57 4 8 25 20
Asics Japan Leisure AI Middle 56 8 11 19 18
Home & Cook France Household FS Middle 54 12 9 21 24
Samsonite USA Personal AS Upper Middle 53 9 10 17 17
Clarks UK Clothing & Footwear FS Middle 50 1 29 7 13
Gant USA Clothing & Footwear AI Upper Middle 49 9 6 12 22
Geox Italy Clothing & Footwear FS Upper Middle 48 8 1 22 17
Calvin Klein Underwear USA Clothing & Footwear AF Upper Middle 45 2 11 15 17
Hugo Boss Germany Clothing & Footwear AI Premium 45 2 10 15 20
Le Creuset France Household AI Upper Middle 44 3 17 4 23
Triumph Germany Clothing & Footwear FS Middle 43 14 5 6 18
Villeroy & Boch Germany Household CI Upper Middle 43 5 9 10 19
Timberland USA Clothing & Footwear AI Upper Middle 42 6 10 20 12
Mango Spain Clothing & Footwear AI Middle 42 11 1 20 10
Quiksilver USA Clothing & Footwear YI Middle 42 10 1 12 19
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS11
Source: FSP
12. Top Expanding Occupiers
Retailer
Country of
Origin
Merchandise Category FISH Price Position
Outlet Centre
Portfolio Extent
# New
Outlet
Stores
CE.
Europe
Northern
Europe
Southern
Europe
Western
Europe
Asics Japan Leisure AI Middle Global Brand 19 6 2 8 3
Home & Cook France Household FS Middle Global Brand 16 5 2 4 5
Guess USA Clothing & Footwear AF Upper Middle Global Brand 15 7 1 5 2
Levi Strauss & Co USA Clothing & Footwear AS Middle Global Brand 15 3 0 5 7
The Body Shop UK Personal FS Middle Super Regional 14 0 5 3 6
Tommy Hilfiger USA Clothing & Footwear AI Upper Middle Global Brand 14 4 2 8 0
Fragrance shop, The UK Personal FS Middle Local 11 0 11 0 0
The North Face USA Leisure FS Upper Middle Global Brand 11 0 4 2 5
Quiksilver USA Clothing & Footwear YI Middle Global Brand 11 2 0 4 5
Utd. Colors of Benetton Italy Clothing & Footwear AS Middle Global Brand 11 1 1 4 5
Desigual Spain Clothing & Footwear YI Upper Middle Super Regional 10 0 1 3 6
Pepe Jeans UK Clothing & Footwear YI Upper Middle Super Regional 10 3 0 3 4
Puma Germany Leisure AS Middle Global Brand 10 2 0 4 4
Superdry UK Clothing & Footwear YF Middle Global Brand 10 0 2 1 7
Vans USA Clothing & Footwear YI Upper Middle Global Brand 10 1 2 5 2
Villeroy & Boch Germany Household CI Upper Middle Global Brand 10 0 1 5 4
Watch Station USA Personal AS Middle Regional 10 0 5 1 4
Ecco Denmark Clothing & Footwear AS Middle Global Brand 9 4 2 0 3
Michael Kors USA Clothing & Footwear AF Premium Global Brand 9 1 1 2 5
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS12
Source: FSP
13. Expanding Occupiers in Key Markets
Rank France Germany Italy Poland Russia Spain United Kingdom
1 The Body Shop (+5) Michael Kors (+4) Liu Jo Man (+8) Bestseller (+6) Albione (+3) Charanga (+4) Fragrance Shop (+11)
2 Levi Strauss & Co (+4) Superdry (+4) Tommy Hilfiger (+7) Asics (+5) Paper Shop, The (+3) Skechers (+3) The Gift Company (+8)
3 L'Oreal (+4) Wellensteyn (+4) VB Store (+7) Italian Fashion (+5) Charuel (+2) Asics (+3) Ernest Jones (+7)
4 Home & Cook (+4) Coach (+3) Flavio Castellani (+6) Mountain Warehouse (+5) Cream della Cream (+2) Forecast (+3) Grape Tree (+6)
5 Le Coq Sportif (+4) Campus (+3) Kennet Street (+6) Symbiosis (+5) Econika (+2) Benetton (+3) Watch Station (+5)
6 Little Marcel (+4) Kneipp (+3) Asics (+5) Home & Cook (+4) Elena Shipilova (+2) The Body Shop (+2) Beauty Outlet (+5)
7 Jeff De Bruges (+4) Lambert (+3) Vans (+5) Bialcon (+4) Just Couture (+2) Home & Cook (+2) Musto (+5)
8 Karl Marc John (+4) Sanetta (+3) Bottega del Sarto (+5) Prochnik (+4) Kanz (+2) Rockport (+2) Suit Direct (+5)
9 Benetton (+3) Sterntaler (+3) Puma (+4) So! Coffee (+4) Marc Cain (+2) Zwilling (+2) Skechers (+4)
10 Puma (+3) Levi Strauss & Co (+2) Alberta Ferreti (+4) Reserved (+3) Milana (+2) Adolfo Dominguez (+2) The Body Shop (+4)
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS13
Source: FSP
14. Evolving Fashion Markets
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS14
Source: FSP
50 70 90 110 130 150
Luxury / Premium
Upper Middle
Middle
Price Position Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision)(100 = Existing Regional Provision)
50 70 90 110 130 150 170 190
Young
Assured
Family
Classic
FISH Lifestage Index
C.E. Europe Northern Europe Southern Europe Western Europe
(100 = Existing Regional Provision)(100 = Existing Regional Provision)
16. Mixed Customer Reviews
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS16
“I went there fairly recently and frankly I was
disappointed. I can get the same items at the same
price in the sales here and I don’t have to travel that
distance. So there really is no incentive for me to go
any more”
“There are some brands there that just don’t look
or feel the right style or quality. It makes me
wonder just what their stock is”
“It’s a bit like a bazaar for some brands there”
“I used to come for the Reebok, but it closed and
the only option was Adidas, but if they closed that
then I wouldn’t bother coming at all any more.”
“This is beyond the ordinary shopping”
“I went with a friend last week. I found lots of
brands that I love: the Kooples, Zadig, American
Vintage, Agnes B, Etro, Diesel (super store)“
“Burberry is awesome at Parndorf. Just bought an
insanely beautiful coat discounted from 1300Euro
to 237Euro! Super sale - late night - AWESOME!
Even without the sale if you are a Burberry fan
you should see the store”
“I often end up cutting my visit short here because I
just get too hungry, or tired or thirsty and I go the
adjacent mall for lunch and then just stay there.”
“The trouble here is that it is always the same.
Static and unchanging. You never feel there will
be anything new or exciting. It lacks any
excitement or thrill of discovery.”
“A lot of the shops are shut and what is open are all
the same, very little variety”
“The stores in this outlet offered mostly ugly old
stocks nothing interesting with almost no discount.
On the previous day we went shopping in an outlet
in Germany the same stores offered much better
prices and goods”
“You will not find Gucci, Prada or Burberry here,
but typical Italian brands that are more friendly for
your wallet, Guess, Marina Militare and lots of
other brands. But you will also find popular brands
such as GAP, Calvin Klein and Tommy Hilfiger. I
personally love this outlet. It is big, the selection of
shops is very diverse”
18. Just How International is the European Industry?
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS18
Source: FSP
0
500
1000
1500
2000
2500
CountofOutletStores
International Occupiers Domestic Occupiers
19. Opportunities For International Expansion
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS19
Source: FSP
0
50
100
150
200
250
300
350
400
- 50 100 150 200 250 300 350 400
ActualCountofInternationalOccupiers
Predicted Count of International Occupiers
AT
NL
IT
DE
RU
UK
FR
NO
SE
DK UARO
ES
CH
PT
GR
LT
IE
PL
BG
20. Which Countries Offer the Right Potential?
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS20
Source: FSP
Young Assured Family Classic Old
France 14% 51% 28% 7% 0%
Germany 13% 51% 21% 15% 0%
Italy 14% 52% 17% 18% 0%
Poland 24% 38% 22% 16% 0%
Russia 9% 60% 16% 15% 0%
Spain 17% 56% 24% 3% 0%
United Kingdom 12% 37% 25% 22% 4%
Europe 16% 48% 22% 13% 1%
Key Countries - Occupier Mix by FISH
21. Which Sites Offer the Right Potential?
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS21
Source: FSP
€0
€50
€100
€150
€200
€250
€300
€350
€400
€450
- 20 40 60 80 100 120 140
2014Turnover(exVAT)
Millions
Count of International Occupiers
22. Which Sites Offer the Right Potential?
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS22
Source: FSP
Young
47%
Assured
16%
Family
29%
Classic
4%
Old
4%
McArthurGlen Roubaix
Young
21%
Assured
25%
Family
29%
Classic
21%
Old
4%
Roppenheim The Style Outlets
Young
15%
Assured
23%
Family
28%
Classic
27%
Old
7%
Quai des Marques Bordeaux
Young
30%
Assured
23%
Family
29%
Classic
14%
Old
4%
Marques Ave. A6 (Paris Sud)
Young
22%
Assured
27%Family
27%
Classic
20%
Old
4%
One Nation Paris
Young
27%
Assured
21%
Family
31%
Classic
16%
Old
5%
L'Usine Channel Outlet
24. The Prague Outlet Centre
The Opportunity for Tommy Hilfiger
24
‘Prague is one of the most beautiful and most visited Capital Cities
in Europe. The Prague Outlet offers an outstanding opportunity
for Tommy Hilfiger to serve affluent, brand conscious residents
and cultural tourists from a highly accessible, well appointed and
purpose built outlet centre, located close to the city’s airport’
The Prague Outlet is a 26,000m2, purpose built development,
located in the North West suburbs of Prague
Highly accessible location – close to Prague Airport and just
2 mins from the city’s orbital highway, convenient access for
residents and tourists alike just 25 mins from the city centre
Footfall is expected to exceed 2.5m visitors a year
Ideal customer base – Residents are typically affluent
professionals and tourists with a high spending power
Large population within 30 minutes – Prague is the 14th
largest city in Europe. 1.1m residents within 30 mins. ranks
The Prague Outlet in the top third of Tommy Hilfiger’s outlet
portfolio
Catchment area
4.6m residents within 90 minutes
The Principal catchment (shown right) contains over 4.1m
residents, largely from relatively high income suburbs
Shopper spend on FOC goods is estimated at €307m
Similar lifestyles to Berlin, Metzingen and Zweibrucken
5.9m tourists in 2013, spending €1bn on retail goods
Prague is underserved in terms of quality outlet floor space.
While Luxury brands such as Burberry, Dior, Hugo Boss,
Hermès, Louis Vuitton Tiffany and Tods operate company
stores on Pařížská Street, the fashion offer for affluent
shoppers and tourists is relatively weak
The Prague Outlet
Source: FSP
25. 25
Source: FSP / Czech Statistic Office
Prague – Tourism
Tommy Hilfiger Portfolio – Similar Locations
The chart shows those outlet centres with
Tommy Hilfiger stores which have similar
resident lifestyle profiles to The Prague Outlet
Prague’s Capital City status means that
residents are significantly better off than other
parts of the Czech Republic
There are strong concentrations of mid scale
and wealthy families plus young professionals
– ideal customers for Tommy Hilfiger
Residents are similar to Berlin, Metzingen and
Zweibrucken suggesting that Tommy Hilfiger
will be very attractive to shoppers
Central Prague is a UNESCO World heritage site Attractions
include Prague Castle, Charles Bridge, Old Town Square,
Jewish Quarter and Lennon Wall
According to MasterCard’s Global Destination Cities Index 2014,
Prague is the 9th most visited city in Europe, ahead of Berlin,
Madrid and Warsaw
In 2013, Prague received 5.9m million visitors a 9% increase on
2012. c5.0m (85%) of these were high spending international
tourists
13% of international visitors are German and 11% Russian.
Chinese tourists grew 16% year on year
In 2013, an estimated €1bn was spent in Prague by tourists on
retail goods, with a further €608m on F&B
Source: FSP / MB Research / Gfk
446
594
0
200
400
600
800
1000
1200
Tourist Retail Spend
€m
Same Day Visitors Overnight Tourists
0.6
0.7
0.8
0.9
1.0
0
1
2
3
4
5
CorrelationCoefficient
60MinuteResidentPopulation(M)
26. 26
Prague – Outlet Capacity
The chart combines outlet centre floor space
provision with population and purchasing power
(disposable income) within 90 mins of major
European Capital Cities to create a simple capacity
benchmark for Prague
After Prague Outlet (phase 3) opens, the city will still
have less outlet floorspace than Rome, Lisbon and
Warsaw
If Tommy Hilfiger locates at The Prague Outlet it
would be the second store in the city – increasing
exposure to the market
Tommy Hilfiger currently trades in duel locations
within Sofia, Warsaw and Moscow, indicating 2
stores in Prague will be sustainable
The chart ranks estimated visitor
spend (taking account of competition
and tourism) at sites within Tommy
Hilfiger’s outlet portfolio
Out of 211 trading outlet centres in
Europe, The Prague Outlet will rank in
the top quartile by potential
The Prague Outlet would have similar
potential to established Tommy Hilfiger
locations including Athens,
Metzingen, Neumunster and
Wolfsburg
Source: FSP
Tommy Hilfiger Locations – Market Potential
Source: FSP
-
50
100
150
200
250
300
350
400
EstimatedMarketPotential(all
visitors)-€m
0
0.4
0.8
1.2
1.6
0
20
40
60
80
100
120
140
160
180
200
PurchasingPowerPerSqm(€M)
PopulationperSqM
Pop per SqM PP per SqM (€)
28. Conclusions
2014 was another good year for European Outlet Centres
There are now over 200 trading outlet centres in Europe which encompass a variety of formats,
price positions and locations . Sales have grown to €11.7bn
While there were fewer new developments, the occupier market saw substantial growth
The occupier average portfolio remains at 2.8 outlets however, key markets remain highly
distinct in terms of occupiers
Italy has overtaken the UK as the largest single European occupier market
Development activity is focused in Germany and Central/Eastern Europe. There are
opportunities to infill under-developed regions including the UK (Midlands/SE), France (Lyon,
Provence) and Spain (Catalonia)
There is theoretical scope for further development of 50 to 75 new outlet centres across
Europe. However, these are increasingly marginal opportunities which require careful study
and continuing expansions at established outlet centres will reduce this potential
Opportunities for added value management are challenging however, there are still
opportunities to increase sales by 20% at under performing sites. The success of this will be
determined by choosing the right sites and recognising consumer opportunities using tools
such as FISH
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS28
29. Conclusions
It is important not to manage or develop outlet centres to a standardised formula or to assume
that market share can easily be won from established sites. Competition is more effective and
investors expect stronger performance, delivered over shorter time scales
The most successful centres are increasingly those with strong provision of international
brands. These generate ‘recognition’ and differentiate sites from discount high streets
Insight is now the essential key to successful development, operational management and
increasingly leasing
Occupiers have never had more choice. It is essential to use tools such as FISH to ensure a
strong match between brands and consumers. Operators must go beyond simple drive times
to provide occupiers with ‘more informed’ intelligence on site potential
So if health is measured in terms of diversity, scale and growth, the European Outlet Industry is
looking well. However, with increasing on-line competition, high street regeneration and new
outlet developments, competition is increasing and the point of difference for consumers is less
clear. The outlet industry must therefore keep evolving
The key to maintaining competitive advantage is to grow the presence and widen the
distribution of international brands. Achieving this will require a combination of multinational
operational skills, supportive investment and of course, FSP’s global insight
June 12, 2015 FSP RETAIL BUSINESS CONSULTANTS29
