{{Olivier DAUVERS}}
_ What can we do with the 5 to 7% excess production? Burn it to avoid dissemination and to protect the brand? Sell it off via a discount chain to dispose of it all? Neither of these solutions is profitable. Brand centres allow the manufacturer to sell his stock directly and at the same time be in control of his brand image.



{{Ulrich NORDHORN}}
_ We are developers, with two outlet centres in Germany. We also develop brands in outlet centres (Puma, Airfield). The retail world trend has changed. Wholesalers have to become retailers otherwise they are losing customers. They have been more productive than in the past therefore they are now investing into outlets to get rid of their stocks. On the other hand, retailers look for a competitive environment in the centres when choosing to sell their brands. Retailers now need more multiple factory outlet centres to sell their merchandise. Some retailers, such as H&M and Zara have a system within their stores where they sell their stocks at discounts. For others, upper medium and medium up, the distribution channel is different.



{{Juan-Marcos GABAS}}
_ Distribution chains are changing their collections increasingly frequently. They use outlets to occupy an additional profitable space in the sales chain, to access a new distribution channel and a population that has not been a priority target. Outlets enable the brand image to be kept under control and they give a direct knowledge of the market. They enable chains to spin off the brand and to carry out a market test at a lower cost. If the concept fundamentals are strictly applied, profitability of brand centres is less in comparison with traditional retailers.



{{Alain SALZMAN}}
_ Even if brand outlets are more sophisticated (architecture, etc.) than factory outlets, both are built on the same fundamental principles – brand names, a price for the consumer and selling off the previous year’s excess stock in advantageous conditions for the manufacturer. Sales per square metre are comparable for traditional shopping centres and brand outlets, the average for the Marques Avenue centres is 3500 € / m².







{{Olivier DAUVERS}}
_ Is the increase in the number of projects in comparison with the available brands a threat to the fundamental principles of the concept?



{{Alain SALZMAN}}
_ There are a lot projects announced but the number of centres that are actually built are less numerous. In France, due to the « loi Royer » (Royer bill), which became the « loi Raffarin » (Raffarin bill), the centres have developed gradually. Today the risk is less, thanks to the fact that the field has become more professional and the fundamental principles have been observed (brand and price).



{{Juan-Marcos GABAS}}
_ There are abundant projects in Spain, too, but they are often slowed down by two players – the promoters, who are exacting with respect to the location of the site and the brands, who are careful to protect their network and to be consistent in their sales strategies.



{{Ulrich NORDHORN}}
_ There is a differentiation between the approach of each outlet centre and what the customer needs to be attracted. We have a further demand for factory outlets because of the change in the retailer industry.



{{Olivier DAUVERS}}
_ What is the average level of branded excess stock? What levels of excess stock determine if the brand is well managed or badly managed?



{{Ulrich NORDHORN}}
_ It depends on the brands and the philosophy of the company. Some brands encounter major problems and have a lot of overstock and others less. If a retailer and/or brand produces more than 2-3 % of overstock, he is not performing well.



{{Olivier DAUVERS}}
_ What is the result of benchmarking between the brand centres and other stock outlet channels (in particular Internet)?



{{Ulrich NORDHORN}}
_ If a brand would start an outlet online business sale, the internet would drive the same sales as a big store.



{{Olivier DAUVERS}}
_ Apart from the volumes of goods sold, what are the differences in marketing and in brand image?



{{Ulrich NORDHORN}}
_ As a retailer, you need to find a clean dynamic way to get rid of the overstock. That is why a factory outlet is an excellent solution for brands. But some like Gucci or Prada burn their unsold merchandise to keep the exclusivity of the brand.



{{Juan-Marcos GABAS}}
_ In Spain, the on-line sales market is relatively narrow and is used mainly for services (travel, music etc.). Internet, like the discount outlet system, raises the problem of the uncertainty as to where the product ends up, whereas de-stocking provides increase brand awareness and visibility.



{{Olivier DAUVERS}}
_ In France, cumulated turnover of « ventesprivées.com » and the sixty-eight sites operating on the same market amounts to almost 400 million Euros …to the detriment of the brand centres?



{{Alain SALZMAN}}
_ Sales in the centres have not dropped. Internet has, in fact, raised consumer awareness to different methods of buying, as a complement to brand centres.
But Internet is no good to those people who do not have it, who do not want to pay on-line, or who want to try out the products. In fact, brand centres grew up because of the brands’ dissatisfaction with the discount chains. Internet operates just like a discount chain, selling off high volumes, but without any control of brand image. Committing to large scale on-line sales could become an irreversible move for a brand, who would then not be able to sell at normal prices.



{{Olivier DAUVERS}}
_ So Internet would provide too much visibility?



{{Alain SALZMAN}}
_ The argument of the brand centres’ responsibility in managing overstocks and brand image is not valid for on-line sales. When Marques Avenue wanted to court the favour of customers in Neuilly, the 16th and 17th arrondissements of Paris, we did not set up in Neuilly, but in the Ile Saint-Denis, to minimise the risk of the target consumers coming across this offer.