ICSC European Outlet Conference Delivering Top Returns March 24, 2015
FSP RETAIL BUSINESS CONSULTANTS
European Outlets: Life Begins at 40 Kenneth Sinclair Gunn
FSP RETAIL BUSINESS CONSULTANTS
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 Delivering Top Returns Top Investors Top Operators Finding Opportunities Conclusions
3
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Current Position 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
4
Turkey is considered to be separate from the core European market, and is not included in this review March 25, 2015
Source: FSP FSP RETAIL BUSINESS CONSULTANTS
Outlet Centre Openings in 2014 Country
Location
Name
Format
Location
Format
GLA (sqm)
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
Source: FSP
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March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
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 Source: FSP
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March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Outlet Industry Expansion 350000
Floorspace Added (m²)
300000
250000
200000
150000
100000
50000
0
Central Europe
Northern Europe
Southern Europe
Western Europe Source: FSP
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March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Capacity for New Outlet Development
Source: FSP
8
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
The Occupier Market
FSP RETAIL BUSINESS CONSULTANTS
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
130
20
29
43
28
Levi Strauss & Co
USA
Clothing and footwear
AS
Middle
123
16
18
37
41
Adidas
Germany
Leisure
AS
Middle
83
21
14
21
18
Puma
Germany
Leisure
AS
Middle
82
20
3
28
24
Tommy Hilfiger
USA
Clothing and footwear
AI
Upper Middle
77
16
13
22
20
Desigual
Spain
Clothing and footwear
YI
Upper Middle
68
4
1
32
31
Home & Cook
France
Household
FS
Middle
66
12
9
21
24
Guess
USA
Clothing and footwear
AF
Upper Middle
62
11
4
26
21
Tom Tailor
Germany
Clothing and footwear
FS
Upper Middle
62
19
1
4
38
Calvin Klein
USA
Clothing and footwear
Lacoste
France
Clothing and footwear
Lindt
Switzerland
Catering
Upper Middle
61
3
8
31
19
FS
Upper Middle
61
8
12
18
23
0
Upper Middle
57
4
8
25
20
United Colors of Benetton
Italy
Clothing and footwear
AS
Middle
57
12
1
25
12
Asics
Japan
Leisure
AI
Middle
56
8
11
19
18
Samsonite
USA
Personal
AS
Upper Middle
55
9
10
17
17
Clarks
United Kingdom
Clothing and footwear
FS
Middle
51
1
29
7
13
Gant
USA
Clothing and footwear
AI
Upper Middle
50
9
6
12
22
Timberland
USA
Clothing and footwear
AI
Upper Middle
50
6
10
20
12
Geox
Italy
Clothing and footwear
FS
Upper Middle
48
8
1
22
17
Mango
Spain
Clothing and footwear
AI
Middle
48
11
1
20
10
Hugo Boss
Germany
Clothing and footwear
AI
Premium
47
2
10
15
20
Le Creuset
France
Household
AI
Upper Middle
47
3
17
4
23
Calvin Klein Underwear
USA
Clothing and footwear
AF
Upper Middle
45
2
11
15
17
Quiksilver
USA
Clothing and footwear
YI
Middle
44
10
1
12
19
Triumph
Germany
Clothing and footwear
FS
Middle
44
14
5
6
18
Source: FSP
10
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Top Expanding Occupiers Retailer
Country of Origin
Merchandise Category
FISH
Price Position
Outlet Centre # New Outlet CE. Europe Portfolio Extent Stores
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 and footwear
AF
Upper Middle
Global Brand
15
7
1
5
2
Levi Strauss & Co
USA
Clothing and footwear
AS
Middle
Global Brand
15
3
0
5
7
The Body Shop
United Kingdom
Personal
FS
Middle
Super Regional
14
0
5
3
6
Tommy Hilfiger
USA
Clothing and footwear
AI
Upper Middle
Global Brand
14
4
2
8
0
Fragrance shop, The
United Kingdom
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 and footwear
YI
Middle
Global Brand
11
2
0
4
5
United Colors of Benetton Italy
Clothing and footwear
AS
Middle
Global Brand
11
1
1
4
5
Desigual
Spain
Clothing and footwear
YI
Upper Middle
Super Regional
10
0
1
3
6
Pepe Jeans
United Kingdom
Clothing and footwear
YI
Upper Middle
Super Regional
10
3
0
3
4
Puma
Germany
Leisure
AS
Middle
Global Brand
10
2
0
4
4
Superdry
United Kingdom
Clothing and footwear
YF
Middle
Global Brand
10
0
2
1
7
Vans
USA
Clothing and 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 and footwear
AS
Middle
Global Brand
9
4
2
0
3
Michael Kors
USA
Clothing and footwear
AF
Premium
Global Brand
9
1
1
2
5
Source: FSP
11
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
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)
The 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)
5
Le Coq Sportif (+4)
Campus (+3)
Kennet Street (+6)
Symbiosis (+5)
Econika (+2)
United Colors of 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
United Colors of 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)
Grape Tree (+6)
Source: FSP
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March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Evolving Fashion Markets FISH Lifestage Index
Price Position Index
(100 = Existing Regional Provision) 50
70
90
110
130
150
170
(100 = Existing Regional Provision) 190
50
70
90
110
130
150
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
13
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Delivering Top Returns
FSP RETAIL BUSINESS CONSULTANTS
European Outlet Centres – Investors Share of Total Turnover
Share of Floor Area
Value Retail & Ptnrs: 14% Henderson: 17%
Henderson: 9% IRUS: 7%
IRUS: 7%
Value Retail & Ptnrs: 5%
McArthurGlen & Ptnrs: 4% VIA Outlets: 3% Blackstone: 3%
VIA Outlets: 5% Blackstone: 4%
Hermes: 3%
McArthurGlen & Ptnrs: 3%
Resolution: 3% AEW: 3%
Hermes: 3%
Unibail Rodamco: 2% Others: 40%
Neinver-TH: 1% Others: 54%
Resolution: 3% Unibail Rodamco: 3% AEW: 3% Neinver-TH: 2%
Source: FSP
15
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
European Outlet Centres – Operators Share of Total Turnover
McArthurGlen: 23%
Share of Floor Area
Value Retail: 15%
Neinver: 9% McArthurGlen: 14%
Value Retail: 5%
Realm: 5% Neinver: 9% Marques Avenue: 4% Freeport: 3% Realm: 4% Promos: 3%
Marques Avenue: 4%
Fashion House: 3%
Promos: 3%
Others: 37%
Freeport: 2% Fashion House: 2% Fashion District: 1% Advantail: 1%
Fashion District: 2% Others: 48%
Advantail: 2%
Source: FSP
16
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Finding Opportunities – Investors €600 Other Investors
Trend (Other Investors)
€500
€400 Millions
Estimated Turnover (2014)
Leading Investors
€300
€200
€100
€0 -
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Gross Lettable Area (Sqm) Source: FSP
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March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Finding Opportunities – Operators €600 Leading Operators
Trend (Other Investors)
€500
€400 Millions
Estimated Turnover (2014)
Other Operators
€300
€200
€100
€0 -
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Gross Lettable Area (Sqm) Source: FSP
18
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Small Number of High Risk Opportunities €100
€80 €70 Millions
Estimated Turnover (2014)
€90
€60 €50 €40 €30 €20 €10 €0 -
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Gross Lettable Area (Sqm) Source: FSP
19
March 25, 2015
FSP RETAIL BUSINESS CONSULTANTS
Delivering Top Returns Despite strong investor interest, there is a lack of available product This is fuelling growth in asset values and increasing expectations of future sales performance Some investors now alternatively looking at funding new development This is fraught with challenges, given shrinking gaps in coverage, competitive challenges and the small number of operators FSP believes that the best performing outlet centres in the next 24 months will be those which deliver a strongly differentiated ‘great day out’ visitor package The top operators achieve this through exceptional design, strong brand mix, inspired marketing, proactive leasing, appropriate and timely expansions and effective operational activity, which focuses on the complete customer experience There is a wide range of performance across the outlet industry, with the most experienced investors dominating the top performing sites It has never been more important for less experienced investors and developers to access high quality pre acquisition and feasibility support and strong management teams in order to deliver top returns
20
March 25, 2015
Conclusions
FSP RETAIL BUSINESS CONSULTANTS
Conclusions 2014 was another good year for European Outlet Centres While there were fewer new developments, the occupier market saw substantial growth There are now over 200 trading outlet centres in Europe which encompass a variety of formats, price positions and locations Development activity is focused in Germany and Central and Eastern Europe. There are opportunities to infill under developed regions including the UK (Midlands/SE), France (Lyons, Provence) and Spain (Catalonia) The top investors have grabbed the best performing sites, leaving relatively few Grade A opportunities for new investors or portfolio expansions Opportunities for added value management are challenging Alternatively, there is theoretical scope for further development of 50 to 75 new outlet centres across Europe. However, these are increasingly marginal opportunities and continuing expansions at established outlet centres will reduce this potential It is no longer acceptable to manage or develop outlet centres ‘by numbers’. Competition is more effective and investors expect stronger performance delivered over shorter time scales An insight based, integrated approach is essential to underpin successful develpoment, operational management and increasingly leasing activity 40 is supposed to be the age when one can relax and begin to enjoy the fruits of ones labour. With good sites at a premium, changing consumer demand and growing competition, it looks as if we will all be working hard to ensure that the sector continues to deliver Top Returns 22
March 25, 2015
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 fspretail@fspretail.com www.fspretail.com www.snap-shop.co.uk
FSP RETAIL BUSINESS CONSULTANTS 19 Manor Courtyard Hughenden Avenue High Wycombe UK, HP13 5RE T +44(0)1494 474740 F +44(0)1494 474262 fspretail@fspretail.com www.fspretail.com www.snap-shop.co.uk