Occupiers: Selling the Future Kenneth S. Gunn, FSP Retail Business Consultants
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
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FSP RETAIL BUSINESS CONSULTANTS
Current Position 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
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 Source: FSP
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FSP RETAIL BUSINESS CONSULTANTS
Openings in 2013 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
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
Historic 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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FSP RETAIL BUSINESS CONSULTANTS
Current Position – Development Capacity
Source: FSP
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
The Occupier Market
FSP RETAIL BUSINESS CONSULTANTS
FISH: FSP’s Classification of Fashion Brands Fashionable – Demonstrates fashionability
Individual – demonstrates taste beyond transitory fashion
Safe – ‘value for money’ merchandise with good enough performance
Young – peer pressure to conform is strong and fashion is a powerful identifying statement
8%
6%
3%
Assured– able to make up own mind and sophisticated in choice
9%
26%
12%
Family – dominated by the financial considerations of running the home and caring for the family
1%
21%
Classic – typically Post-Family. Many similarities with Assured but less self confidence about the ‘rightness’ of purchase decisions
6%
6%
Old – ‘given up’. Not seeking to make a statement about themselves through their purchases 8% Indicates the percentage split of all European Outlet Centre fashion brands in each FISH Segment
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Homely – Items are bought purely for replacement. Price is important for goods whose main attribute is utility
1%
Source: FSP FSP RETAIL BUSINESS CONSULTANTS
Top 25 Occupiers by Portfolio Retailer
Country of Origin
Merchandise Category
FISH
Price Position
# Outlet Stores
CE. Europe
Northern Southern Europe Europe
Western Europe
114 105 77 74 69 62 60 60 56 54 52 52 50 49 47 46 45
19 16 19 21 2 4 12 14 7 15 4 7 5 1 9 1 7
31 17 7 16 7 0 12 11 8 1 6 10 3 12 4 10 0
39 34 29 21 35 31 15 16 18 4 23 17 21 18 13 13 20
25 38 22 16 25 27 21 19 23 34 19 18 21 18 21 22 18
Nike USA Levi Strauss & Co USA Puma Germany Adidas Germany Calvin Klein USA Desigual Spain Lacoste France Tommy Hilfiger USA Home & Cook France Tom Tailor Germany Lindt Switzerland Samsonite USA Guess USA Calvin Klein Underwear USA Gant USA Hugo Boss Germany Geox Italy
Leisure Clothing & Footwear Leisure Leisure Clothing & Footwear Clothing & Footwear Clothing & Footwear Clothing & Footwear Household Clothing & Footwear Catering Personal Clothing & Footwear Clothing & Footwear Clothing & Footwear Clothing & Footwear Clothing & Footwear
YI AS AS AS AF YI FS AI
AF AF AI AI 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
Clarks
UK
Clothing & Footwear
FS
Middle
44
0
27
7
10
Reebok Timberland Le Creuset Triumph Mango
UK USA France Germany Spain
Leisure Clothing & Footwear Household Clothing & Footwear Clothing & Footwear
AS AI
Middle Upper Middle Upper Middle Middle Middle
44 44 43 42 41
14 4 3 11 13
7 10 16 4 1
14 19 3 9 17
9 11 21 18 10
Benetton
Italy
Clothing & Footwear
AS
Middle
41
11
1
22
7
Villeroy & Boch
Germany
Household
Upper Middle
40
5
12
6
17
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April 7, 2014
FS
FS AI
Source: FSP
FSP RETAIL BUSINESS CONSULTANTS
Top 25 Expanding Occupiers Levi's Sunglass Hut Asics Geox Puma Lacoste Villeroy & Boch
USA Italy Japan Italy Germany France Germany
Clothing & Footwear Personal Leisure Clothing & Footwear Leisure Clothing & Footwear Household
AS AI AI AI AS FS CI
Middle Premium Middle Upper Middle Middle Upper Middle Upper Middle
105 18 39 45 77 60 40
# New Outlet Stores 20 17 16 14 12 12 12
Crocs
USA
Clothing & Footwear
FS
Middle
23
12
1
4
5
2
Fossil Adidas Guess Swarovski Desigual The Body Shop Lindt Mustang Samsonite Quiksilver
USA Germany USA Austria Spain UK Switzerland Germany USA USA
Personal Leisure Clothing & Footwear Personal Clothing & Footwear Personal Catering Clothing & Footwear Personal Clothing & Footwear
AI AS AF AS YI FS AI AS YI
Middle Middle Upper Middle Upper Middle Upper Middle Middle Upper Middle Middle Upper Middle Middle
28 74 50 19 62 26 52 32 52 35
12 11 11 11 10 10 10 10 10 9
0 5 3 0 1 0 1 7 4 5
6 3 1 3 0 5 4 0 1 0
2 2 2 3 5 1 1 1 2 1
4 1 5 5 4 4 4 2 3 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
Retailer
10
Country of Origin
Merchandise Category
FISH
Price Position
# Outlet Stores
CE. Europe
Northern Europe
Southern Europe
Western Europe
4 0 1 2 3 6 1
1 7 6 0 2 3 7
7 9 4 7 2 2 1
8 1 5 5 5 1 3
4 Source: FSP
April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
Top Expanding Occupiers in Key Markets Rank France
Germany
Italy
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)
Levi's (+2)
Bellissimo (+5)
(+) Indicates the number of new stores
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Poland
April 7, 2014
Regatta (+3)
Source: FSP FSP RETAIL BUSINESS CONSULTANTS
Evolving Fashion Markets FISH Lifestage Index
FISH Attitudinal Index
(100 = Existing Regional Provision) 40
60
80
100
120
140
(100 = Existing Regional Provision) 160
40
60
80
100
120
140
160
180
Young Fashionable
Assured
Individual
Family
Safe 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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FSP RETAIL BUSINESS CONSULTANTS
Looking Ahead
FSP RETAIL BUSINESS CONSULTANTS
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
StĹ™Ăbro
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
Source: FSP
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
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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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
Future Position – Development Capacity
Source: FSP
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
Improving Location Decision Making
FSP RETAIL BUSINESS CONSULTANTS
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
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FSP RETAIL BUSINESS CONSULTANTS
Even Top Brands have Under Performing Outlets % Outlet Portfolio Split
40% 35% 30% 25% 20% 15% 10% 5% 0% Quartile 1: <=€1,850/sqm
Quartile 2: <=€2,500/sqm
Quartile 3: <=€3,500/sqm
Quartile 4: >€3,500/sqm
European Outlet Centre Performance Quartiles All Occupiers
Top 60 Occupiers
Top 30 Occupiers
Source: FSP
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
Drive Times are not Reliable Indicators of Potential €450 €400 Millions
Estimated 2013 Turnover
€500
€350 €300 €250 €200 €150 €100 €50 €0 0
5
10
15
20
25
Millions
Population within 90 minutes
Source: FSP
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FSP RETAIL BUSINESS CONSULTANTS
Performance Varies Within Regions €450 €400 Millions
Estimated 2013 Turnover
€500
€350 €300 €250 €200 €150 €100 €50 €0 0
10,000
20,000
30,000
40,000
Gross Area (m2) C.E Europe
Northern Europe
Southern Europe
Western Europe
Trendline
Source: FSP
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FSP RETAIL BUSINESS CONSULTANTS
Good Design is Increasingly Important €450 €400 Millions
Estimated 2013 Turnover
€500
€350 €300 €250 €200 €150 €100 €50 €0 0
10,000
20,000
30,000
40,000
Gross Area (m2) Outlet Village
Outlet Mall
Factory Outlet
Other
Trendline Source: FSP
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FSP RETAIL BUSINESS CONSULTANTS
A Strong Brand Line Up Is Important €450 €400 Millions
Estimated 2013 Turnover
€500
€350 €300 €250 €200 €150 €100 €50 €0 0
10
20
30
40
Count of Top 60 Occupiers (by Portfolio)
Source: FSP
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
It Is About More Than Just the Operator €450 €400 Millions
Estimated 2013 Turnover
€500
€350 €300 €250 €200 €150 €100 €50 €0 0
10,000
20,000
30,000
40,000
Gross Area (m2) McArthurGlen / Value Retail
Major Operators
Others
Trendline
Source: FSP
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FSP RETAIL BUSINESS CONSULTANTS
Conclusions
FSP RETAIL BUSINESS CONSULTANTS
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
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April 7, 2014
FSP RETAIL BUSINESS CONSULTANTS
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 â&#x20AC;&#x2DC;highâ&#x20AC;&#x2122; 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
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FSP RETAIL BUSINESS CONSULTANTS
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
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FSP RETAIL BUSINESS CONSULTANTS
Merci pour l'écoute
FSP RETAIL BUSINESS CONSULTANTS
Ken Gunn Director
FSP RETAIL BUSINESS CONSULTANTS
T+44(0)1494 474740 M+44(0)7773 779919 F+44(0)1494 474262
19 Manor Courtyard Hughenden Avenue High Wycombe UK, HP13 5RE
Ken@fspretail.com
T +44(0)1494 474740 F +44(0)1494 474262 admin@fspretail.co.uk www.fspretail.co.uk www.snap-shop.co.uk