The operators: specialists or generalists (1st July 2008)
|{{Operators}}|{{Number of centres}}|{{Selling area in sqm}}|
|McArthurGlen|17|367.100|
|Realm|12|167.550|
|Neinver|10|139.000|
|Value Retail|9|125.600|
|Freeport|3|113.200|
|Concepts & distribution|8|103.300|
On the 1st July 2008, these 6 operators shared :
-* 37% of the existing centres in Europe
-* 47,5% of the european sales area
{Factory stores capture 2.3 % of the French clothing and shoe market and represent a little more than 1% of the turnover achieved by the retail sector. This distribution channel therefore remains marginal, even if we can consider that it has found its customer base.}
{{Distribution among men, women and socioprofessional categories}}
_ Originally confined to seconds and ends of series, the array of products offered in factory stores has widened and the ranges have greatly increased, attracting a much wider palette of consumers. People with average purchasing power have been joined by those with high purchasing power who, up until recently, were, first and foremost, customers of town centre stores. In Troyes, the average purchase basket is 208 €.
{{The fashion effect}}
_ The desire to consume in these centres is maintained by fashion and the feeling that the concept is rare. Fashion awareness is more noticeable on the women’s market than on the men’s market. Today a woman of 60 years wishes to dress fashionably, In just two years some products can be considered to be out of fashion and, whatever the reduction, will not find a purchaser.
{{Greater volume}}
_ Consumers tend to purchase less expensive clothing. The opening of a new retail outlet generates a necessary reduction in sales by other retail outlets. Consumers demand clear rules guaranteeing in the brand centres the presence of products with real information.
{{Shops and leisure activities}}
_ For many, the future of factory stores is based on an alliance between stores and leisure activities. Consumers increasingly wish to enjoy themselves when they make their purchases one to three times a year. This is why brand centres are appearing near large leisure centres or offer, themselves, fun, sports or cultural activities.
{{The brand and the price}}
_ Consumers are seeking an attractive brand at a competitive price. Operators must offer a balanced selection of brands of world renown, brands linked to a fashion phenomenon and more or less prestigious brands that generate visits…
{{Risks and opportunities}}
_ The questions prompted by the installation of a factory store are linked to a number of issues: territorial planning, urbanism, consumers’ rights and the right to competition. Factory stores today pose the same problems as hypermarkets in the past: major growth over twenty years, negative impact on traditional retailers and town centres. The majority of the projects launched in France are also perceived as challenges in the area of local development and territorial stability: a factor in territorial planning, attractiveness, economic development, job creation and trade tax, or a danger for local traditional retailers.
{{Rare or commonplace}}
_ Should we tighten regulations on the installation and extension of brand centres to prevent them becoming commonplace, thus weakening the concept? The existence of too many factory stores could indeed generate their decline and that of brands. By having recourse to them to sell off excess stock, isn’t there the risk that industrialists will destabilise other forms of distribution?
{{Specificity or generalisation}}
_ Can articles other than clothing and household equipment be concerned by this type of distribution?
_ Must projects for such installations be limited to regions that can justify a strong industrial tradition (Roubaix, Troyes, Romans, Cholet, etc.), as certain local elected representatives demand? With, as a result, a ban on any installation in areas that do not have the right due to economic, geographic and historical reasons, although they have a high tourist potential, for instance southern and south-western France?
{{Town centre or outskirts}}
_ At present town centres are no longer as attractive as in the past. In France clothing consumption is marking a downward trend, which means that new factory stores could lead to a transfer of customers from the town centres to these new structures. The challenge consists in strengthening town centres’ power to attract in order to direct the flow of commercial tourists in their direction.
_ In Troyes, we were able to see the negative and positive effects.
_ In personal equipment, the impact on traditional retailers (in particular on retailers in Troyes town centre) has been spectacular. A real shock wave followed the creation of brand centres on the outskirts. This was expressed in a devitalisation of independent retailers, weakened at the same time (as in all French town centres) by the sudden upsurge in organised retailing (franchise outlets, branches, etc.).
The stores that closed down have been replaced by others and the greater number of service providers in the town centre’s did not prevent banners such as H&M from setting up there. Without factory stores, the town of Troyes would not have welcomed close to 2 million visitors in 15 years in its town centre. This commercial tourism has been joined by cultural tourism due to the town’s historical attractions.
{{History or geography}}
_ The reasons for the geographic localisation of a new centre go far beyond the existence of industrial roots and a textile past: motorway links, density of tourist flows (Marne-la-Vallée), population (Paris region), local purchasing power and the proximity of a foreign market are criteria to be taken into account. It goes without saying that territories are competing today as future locations for brand centres.
{{Stocks or relocations}}
_ The selling of excess stocks tops the list of distributors’ and brand managers’ concerns. These excess stocks represent 2 or 3% of the total volume of the market and between 0.7 and 10% of the volume of the products diffused according to the brands and banners.
_ Three possibilities are offered to a firm that wishes to get rid of its excess stock: destruction of the products, sale to discount stores or sale in factory stores. Factory stores offer the firm the advantage of controlling the distribution and, therefore, protecting the brand and the distribution network.
-* Brand stores are raking it in!
-* Brand centres: What performance for what market?
-* Brand centres in France: How are they evolving?
-* Brand centres: « Risks and consequences of their development?» (…)
If you want more information in french [click here->http://www.magdus.fr/Marche-et-tendances-prix-marques]}}}
————
{{{If you want contact us:}}}[->accueil@magdus.com]
{{{FOC’ sector in Europe}}}
{{The operators: specialists or generalists (1st July 2008)}}
|{{Operators}}|{{Number of centres}}|{{Selling area in sqm}}|
|McArthurGlen|17|367.100|
|Realm|12|167.550|
|Neinver|10|139.000|
|Value Retail|9|125.600|
|Freeport|3|113.200|
|Concepts & distribution|8|103.300|
On the 1st July 2008, these 6 operators shared :
-* 37% of the existing centres in Europe
-* 47,5% of the european sales area
{{{More information about FOC’ sector in Europe}}}
_
[{{Economic surveys}}->http://www.magdus.fr/Fonctionnement-des-centres-de]
_ {Source : European Factory Outlet Centres Observatory}
-*[{{All the studies…}}->http://www.magdus.fr/All-the-studies,1495]
-*{{Study: Which factory outlet centre? The UK consumer’s selection criteria}}
{{Author}} : Georgina Whyatt, Business School, Oxford Brookes University.
{{ Abstract :}} Factory outlet centres are the fastest growing retail format in Europe. This is at a time when many ‘traditional’ shopping centres are suffering from consumer caution and have responded by differentiating their offer. Factory outlet centres are part of this response. There has, however, been little academic research that focuses on this new style of shopping centre. This paper examines what is important to the UK factory outlet centre shopper, and ranks a range of choice criteria to better understand why this consumer visits one such centre in preference to another. Implications for retailers and directions for future research are provided.
_
_ {(r 2007 Elsevier Ltd. All rights reserved.)}
_
-* Read the full version in PDF format
{{{Share of household consumption expenditure on clothing and footwear in 2003}}}
|{{Country}}|{{Share (%)}|
|{{ Greece }}|{{ 10,1}|
|{{ Italy }}|{{ 9,0}|
|{{ Latvia* }}|{{ 8,4}|
|{{ Portugal* }}|{{ 7,1}|
|{{ Cyprus }}|{{ 6,9}|
|{{ Austria }}|{{ 6,9}|
|{{ Slovenia }}|{{ 6,3}|
|{{ Estonia }}|{{ 6,1}|
|{{ Malta* }}|{{ 6,1}|
|{{ United Kingdom }}|{{ 6,0}|
|{{ Spain}}|{{ 5,9}}|
|{{ Lituania }}|{{5,9}}|
|{{ Germany }}|{{5,5}}|
|{{ Netherlands }}|{{5,5}}|
|{{ Belgium }}|{{5,4}}|
|{{ Irland }}|{{5,4}}|
|{{ Sweden }|{{5,2}}|
|{{ Czech Republic }}|{{5,1}}|
|{{ Denmark }}|{{5}}|
|{{ Finland }}|{{4,7}}|
|{{France}}|{{4,5}}|
|{{Luxembourg}}|{{4,5}}|
|{{ Poland }}|{{4,4}}|
|{{ Hungary }}|{{4,2}}|
|{{ Slovakia }}|{{3,7}}|
————
{{ Contact}} : [->accueil@magdus.com]
The »Factory Outlet Centers » concept was imported from the United States where there are more than 340.
After a first wave of penetrations, concerning more particularly France during the 1980s, the concept spread to continental Europe from 1993 onwards.
Early in the 1990s, Clarks, the shoe manufacturer based in Great Britain, seeking both a use for buildings adjoining the factory and a solution to its excess stock problems, opened its first factory store and sold its excess merchandise at reduced prices. Seeing the success of this new store at the factory exit, he decided to increase the commercial offer by adding an entire “village” of stores of the same type.
Clarks then drew inspiration from the American concept, creating the first »Factory Outlet Center », »Clarks Village » in Street (Somerset) in 1993.It was on that date that “ Marques Avenue”, France’s first new generation factory store centre, opened in Troyes.
{{More information about the sector:}}
-*Innovative centres and projects (2007)
{{{Evolution of the concept in Europe : from Factory Outlet Centres to outlet villages (2009)}}}
{{[Download the figure : Evolution of the concept in Europe}}->http://www.magdus.fr/pdf/concept_evolution_in_europe.pdf]
Factory Outlet Centres consisted only in selling unsold articles, but the commercial concept has evolved since the mid-1990s. The progressive orientation of the concept towards “fun shopping” has considerably strengthened the tourist dimension of Factory Outlet Centres. Four generations of centres can be distinguished (cf. figure). This typology, which brings to light the qualitative evolution of the concept, is based on four criteria: the marketing strategy of the centres, their architecture, their location as well as their customer base. All European countries did not experience these four generations of centres – for example, only France has actually experienced the first generation.
{{More information only in french:}}
-*Evolution du concept en Europe (2004)
-*Centres de marques : les nouvelles approches du concept en Europe (2004)
Whilst the concept offers variants in its general aspect (mixed distribution/culture/leisure centres, distribution centres open to several sectors of activity, centres specifically reserved for personal equipment, etc.), there is a common denominator among these different formulas: the brands. But for a centre to function it is not a question of attracting just any brand type. There is, in fact, a real brand typology that must be taken into account in reasoning when planning a centre (from the international brand to the young brand of the moment). The brands fulfil different “functions”: some strengthen a centre’s renown, others tend more to generate visits or make the centre part of a hot trend.
In France, whilst a few industrialists still refuse to see their brands distributed in these specialised centres, there are many who sell their brands through them. This sales method is therefore becoming a real link in the distribution chain.
The quality of the commercial offer makes the concept particularly attractive in the eyes of consumers. The latter do not hesitate to travel considerable distances to purchase in these stores, their motivation stemming from the possibility of purchasing brand products at prices announced as 30 to 50% lower than in traditional distribution channels.
The offer mainly concerns articles of clothing (ready-to-wear, underclothes, lingerie, shoes, accessories) as well as household articles (decoration, household linen, tableware).
{{More information only in french,}} [click here->http://www.magdus.fr/Une-forme-de-distribution-atypique]
-* Main chronological milestones;
-* History of factory stores;
-* Parallel between the development of Aube groups and national centres;
-* In Troyes: «From hosiery to factory stores» (…)
————
_ Contact : [->accueil@magdus.com]
{{{Le secteur des centres de magasins d’usine et villages de marques en Europe}}}
-*{{Les magasins d’usine et villages de marques : temples du shopping touristique. Panorama de l’évolution des centres de magasins d’usine et villages de marques en Europe}}
_ Source : Caroline LAMY, experte Magdus. Article publié dans le numéro spécial « Tourisme et shopping » (1re partie : Luxe, mode et bonnes affaires) de la revue « Espaces, tourisme et loisirs » n°269, avril 2009.
{{{Plus d’infos sur le secteur en Europe}}}
_
[{{Notes de conjoncture européenne}}->http://www.magdus.fr/Fonctionnement-des-centres-de]
_ {Source : Synthèses semestrielles de l’Observatoire européen des centres de marques et magasins d’usine}
-*{{Ouverture des centres de marques européens le dimanche : situation et position de leurs dirigeants}}
_ {Source : Observatoire européen des centres de marques et magasins d’usine, juillet 2007}
-* {{Innovation, centres de marques et magasins d’usine}}
_ {Source : Observatoire européen des centres de marques et magasins d’usine, 2007}
-* {{Centres de marques : les nouvelles approches du concept en Europe}}
_ {Source : Observatoire européen des centres de marques et magasins d’usine, 2004}
-*{{Profil type du consommateur anglais}}
_ {Source : Observatoire Economique CCI Troyes et Aube, juillet 2004}
-*[{{Toutes les études…}}->http://www.magdus.fr/Analyse-et-developpement-du]
{{{Le marché de l’habillement en Europe}}}
_
Le marché suisse du prêt-à-porter
_ {Source: Ambassade de France en Suisse – Mission économique, octobre 2008}
_
Le marché du prêt-à-porter féminin en Irlande
_ {Source: Ambassade de France en Irlande – Mission économique, août 2008}
_
Le marché de l’habillement en Lituanie
_ {Source: Fiche synthèse sur le marché de l’habillement en Lituanie, avril 2006}
Quelques observations sur le marché allemand de l’habillement
_ {Source : Evelyne Chaballier, directrice du département études et conjoncture de l’IFM (Institut Français de la Mode), 2005.}
{{{Plus d’infos sur le marché de l’habillement en Europe}}}
————
_ Contact : [->accueil@magdus.com]
-* François Baroin, Maire, Ville de Troyes
-* Christine Baudchon, Directeur du réseau, Zapa
-* Alessandro Bedeschi, General Secretary, European Association of Fashion Retailers
-* Jean-Loup Besquent, Directeur filiale outlet europe, CWF / Vecopri
-* R
| {{Facilitator}} |
| {{Bruno Rogowski}} {Magdus} |
| {{Speaker}} | |
| {{Caroline Lamy}} specialist {Magdus} |
|
{{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.
In January 2009, the magdus team has interviewed the marketing managers of several factory outlet centres in France to collect their balance sheet of year 2008. This synthesis brings to light the big tendencies of the activity of the centres in 2008 with regard to the balance sheet of year 2007. In an unfavourable cyclical context, in particular during the second half-year 2008, it seems that the majority of the Factory Outlet Centres had a good activity during year 2008.
{If you are interested in reading the results of the study in English, please contact us: accueil@magdus.com}
Les centres de marques ne fonctionnent pas tous à l’identique.
Leur pouvoir d’attraction, et donc leur impact, diffèrent en fonction de leur plancher commercial, de la densité des marques attractives, de l’environnement dans lequel ils s’insèrent (…)
Toutefois, l’observation des magasins d’usine et centres de marques européens permet de dégager une tendance générale : autour du concept de base, se greffent désormais maintes activités ludiques, de divertissement et de loisirs.
Pour éclairer votre point de vue sur l’évolution du concept, vous pouvez télécharger les études suivantes:
-* Innovation, centres de marques et magasins d’usine (2007)
-* Centres de marques : les nouvelles approches du concept en Europe (2004)
Pour toutes informations complémentaires, vous pouvez nous joindre par courriel : [->accueil@magdus.com]
————
-* François Baroin, Maire, Ville de Troyes
-* Christine Baudchon, Directeur du réseau, Zapa
-* Alessandro Bedeschi, General Secretary, European Association of Fashion Retailers
-* Jean-Loup Besquent, Directeur filiale outlet europe, CWF / Vecopri
-* R