{{Caroline LAMY}}
_ Factory shops adjoining production sites have existed since the 1930s, but the modern concept of brand centres did not emerge until 1974, in the United States and 1984, in France. The sector did not begin to become truly professional until ten years later, with McArthurGlen, Concepts & Distribution, etc. By the end of the 1990s, brand centres had literally exploded.
_ The first, minimal, generation started in 1984 with the « Usine » at Roubaix. Factory outlets were set up in industrial towns and the goods they offered were disparate. The brands were inconspicuous and customers, mostly families, came because of the prices. The architecture was minimalist (warehouses), there were no services and advertising was by word of mouth.
_ In 1993, the second generation arrived, underpinned by professionals (Marques Avenue at Troyes). They emphasised the brands and guaranteed price mark-downs. The centres were laid out like traditional shops and there was media advertising; but the target population was still families from industrial towns and urban areas.
_ The third generation appeared in the United Kingdom at the end of the 1990s, marking a new breakthrough – increased brand selection and enhancement, improved shopper comfort, customer loyalty schemes in a market that was becoming extremely competitive. New centres were set up in major tourist areas and capitals, in order to attract tourists.
_ The fourth generation, which also started in the United Kingdom around 2000, concentrates on top-of-the-range products. Operators have created centres dedicated to certain types of products or themes, and combine leisure and tourist activities, referred to as « funshopping ». These centres meet High Quality Environmental standards.



{{Bruno ROGOWSKI}}
_ You often find the same operators present in all the different generations of the concept. How did the concept develop in Europe?



{{Caroline LAMY}}
_ Ten years after the creation of the « Usine » in Roubaix, factory outlets emerged across Europe, from the west to the east. In 1993, there were 8 centres in Europe, and today there are 150, or a total trading surface area of two million square metres.
The United Kingdom, Italy, Spain and France are the market leaders. Brand centres exist mainly in a large areas in the centre/west of Europe, where there is high through traffic and high population density. The number of projects is exploding – over 2.3 million square metres are currently at the project stage.



{{Bruno ROGOWSKI}}
_ Do any of the second generation projects still exist?



{{Caroline LAMY}}
_ Operators tend to adopt the fourth generation concept, in order to distinguish themselves from their competitors. However, there are certain cultural differences, which may be an obstacle; in France, for example, « funshopping » has not been spontaneously accepted.



{{Bruno ROGOWSKI}}
_ Who are the operators today?



{{Caroline LAMY}}
_ Today there are over sixty operators, the leader being McArthur Glen. The six European leaders share 36 % of the activity, but all operators are increasing the number of their centres. We can quote some key dates – in 1993, the Marques Avenue centre at Troyes opened, and Clarks Village in the United Kingdom. In 1995 McArthurGlen entered the market. From 2000 onwards, investors became increasingly present in the market and in 2007, Unibail and Rodamco Europe merged.



{{Bruno ROGOWSKI}}
_ What are the major current development trends in this brand centre sector?



{{Caroline LAMY}}
_ It could be said that there are six major trends:
– player diversification – new players are emerging, those who are extending their activities (Ikea, Unibail), to which you can add local operators and investors (banks, insurance companies, pension funds, etc.)
– marketing policy – the market offering is becoming more diversified and is going up-range. Operators are insisting on high architectural quality in the new theme centres (tourism and leisure) and are seeking to play a role in sustainable development.
– location – centres are being set up along major routes and in tourist areas and major European cities.
– a new method of distribution – apart from relieving excess stock, the centres are true business areas.
– brands and the regions – previously the Brands tended to neglect brand shops. Now the centres generate throughput, which is stimulating interest from the brands and from the regions.
– competition is growing between the operators, but also perhaps with other distribution channels, such as internet.



{{Discussions with the floor}}



{{Neil CHAPMAN}}, Chameleon Retail
_ As generations move on, what type of buildings are developers constructing, strip malls or village type outlets?



{{Caroline LAMY}}
_ The « village » concept appears to predominate over strip malls, but each operator has his own strategy; Concepts & Distribution, unlike Mac Arthur Glen, does not build villages.



{{Alexandre SEJOURNE}} (Real-Estate Director, Marques Avenue)
_ We should beware of « seeking out every square metre ». This would lead to centres being isolated in small collectivities. Centres that are too big do not enhance the brands. We must not deceive the consumer with the attractive villages.



{{Barbara HORATZ}} (BVS Outlet villages)
_ There is not one single architectural solution. In Germany, for example, consumers appreciate steel and glass structures just as much as the village concept.



{{Bruno ROGOWSKI}}
_ Is a village more likely to reflect local features and to be integrated into the environment?



{{Barbara HORATZ}} (BVS)
_ There is room for several concepts.



{{Bruno ROGOWSKI}}
_ With the surface area increasing, is not the problem a shortfall of brands for the centres?



{{Alexandre SEJOURNE}} (Real Estate Director, Marques Avenue)
_ We have to observe marketing levels after the centres have opened. At Nantes, Usine Center on the Atlantis area, where there is high quality architecture, closed after six months. The centres need the brands.



{{Neil CHAPMAN}}, Chameleon Retail
_ In terms of architecture, are village centres and covered malls mostly built?



{{Robert VAN DEN HEUVEL}} (BVS Outlet villages)
_ Outlet centre architecture depends on the country so as all the shopping centres. Thus there is no definite trend.



{{Bruno ROGOWSKI}}
_ How does Nike view this multiplication of projects?



{{Robert VAN DEN HEUVEL}} (BVS Outlet villages)
_ Nike can be found in every centre and generally do well in all the markets.



{{Bruno ROGOWSKI}}
_ Will 20% of unsold stock be enough to meet the potential demand associated with the announced development of these centres? No doubt they will need more goods and more unsold stock!



{{From the floor}}
_ Brands that only use the Outlet channel are a danger for brand centres, and the centres should make sure that they do not host such brands.



{{Bruno ROGOWSKI}}
_ Is there a minimum size for a centre?



{{Alexandre SEJOURNE}}
_ That depends on the country. In Italy, the large centres are profitable because the share of consumption for clothing is 8 %. In France, it is only 4 %, so centres in France prefer to grow gradually.



{{Robert VAN DEN HEUVEL}} (BVS Outlet villages)
_ Nowadays, a minimum of 15000 to 25000 square metres is necessary for an outlet centre, otherwise customers will not want to drive a certain distance to visit it.



{{Cédric MOULIN}} (VF Europe)
_ For VF, it is not the size or the village concept that counts, but the location in relation to through traffic and the trading area. What is more, if the market offering is « diluted » because there are too many tenants, customers are not really sure why they are coming to the centres.



{{Bruno ROGOWSKI}}
_ How does a brand make its choice?



{{Cédric MOULIN}} (VF Europe)
_ A brand selects the most dynamic centres, not necessarily the largest ones. Some centres are too focused on the French consumer, and their advertising is in French – the brands are looking for more exposure.



{{Christian GARCIA}} (Managing Director of Mango worldwide)
_ Are developers interested in setting up concepts in the Middle East?



{{Robert VAN DEN HEUVEL}} (BVS Outlet villages)
_ It depends on the capacity but also on future opportunities like in China. Currently, we are too much of a small player to invest in the Middle East.



{{Neil CHAPMAN}}, Chameleon Retail
_ From a retailer’s perspective, one needs to find the owner lasting in the long term and investing in the right scheme (marketing, size, brands).



{{Robert VAN DEN HEUVEL}} (BVS Outlet villages)
_ The local knowledge and expertise are crucial.



{{Christian GARCIA}} (Managing Director of Mango worldwide)
_ We opened an outlet centre in Dubai and one in the Philippines but the local knowledge is missing even though they have the capital and well designed outlets.



{{Cédric MOULIN}} (VF Europe)
_ We have to open up to Eastern Europe. It is true, too, that some very nice concepts are being developed in India and in Dubai.



{{From the floor}} (McArthurGlen representative)
_ India is a booming market. The big brands are in the big shopping malls. The question is who are the tenants ready to settle in an outlet in India?



{{Christian GARCIA}} (Managing Director of Mango worldwide)
_ India is indeed a good market but in Dubai there are also many opportunities.