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]}}}

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{{{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}}|

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{{ 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]

{{Situation au 1er avril 2008}}


Avec 217 centres en activité pour un plancher commercial supérieur à 5,3 millions de m², l’Amérique du Nord est le continent qui compte le plus grand nombre de Factory Outlet Centers (centres de magasins d’usine). Avec près de 170 centres pour une surface de vente totale de plus de 2,3 millions de m², l’Europe arrive en seconde position.

[{{En savoir plus sur les marchés et tendances en dehors de l’Europe}}->http://www.magdus.fr/xxxxx]

—–

{{Olivier COSTIL}}
_ Turnover from Internet selling sites has multiplied this year. This mostly concerns the fashion sector.



{{Olivier LE FLOCH}}
_ The low prices explain the enthusiasm for Internet buying. However, we try not to go below 50 % of the conventional market price, so as not to harm this sector too much. All VIP.com sales are validated by the brands, which is not the case of all Internet sales. For the last six months we have been selling preview items at market price. Internet enables us to reach more customers and a more widespread geographical area than the conventional private shop. Lingerie, ready-to-wear clothing, household accessories and equipment are the most popular products on our site. Brand-awareness plays an important role. So we want to attract as many known brands as possible to our site.
_ The main competitor to VIP.com (14 million € sales) is « ventesprivées.com » (250 million € sales), but our company is profitable. In order to distinguish ourselves from our competitors, we have created topic-based journals. We have also provided broad-band to 49 % of our customers. This brings us new customers, as if they do not have broad band, it is not possible for internauts to buy on the Internet.
_ The Internet is a complement to factory outlets and traditional shops which publicise brand names. We work on impulse purchasing by sending emails every two days to people who have signed up. Many people buy things that they never use, but they think they are getting a bargain.



{{Olivier COSTIL}}
_ Do your customers consider these emails to be an intrusion into their private life?



{{Olivier LE FLOCH}}
_ No, there are very few unsubscriptions. We respect the wishes of those who do not want to receive emails.



{{Olivier COSTIL}}
_ Is not the development of sites on Internet a risk for your activity?



{{Olivier LE FLOCH}}
_ No, because poor quality sites and those which do not respect the brand image are not likely to endure. We have contracts with the brands. In this way they control, free of charge, animations, prices and the product description. Moreover, in France there is room for three players such as ventesprivées.com, because the brands are producing more and more.



{{Olivier COSTIL}}
_ How is your remuneration calculated?



{{Olivier LE FLOCH}}
_ If a product is sold on the traditional market for 100 euros, we sell it on our site for 50 euros. Which means we have bought it from the brand at between 20 and 25 euros.



{{Olivier COSTIL}}
_ This morning, a manufacturer said that private sales were less profitable than running a factory outlet.



{{Olivier COSTIL}}
_ That depends on the supplier.







{{Discussions with the floor}}



{{Vincent LEPERCQ}} (Journal du textile)
_ Why do the companies that run factory outlets not have an Internet sales site?



{{Olivier LE FLOCH}}
_ Some mark-down sites do not respect the brands. Physical mark-down outlets and web professionals are two separate areas of activity.



{{Franck LARZILLIERE}} (Seb)
_ What is your customers’ profile? Has it changed? Is you customer base different from your competitors’?



{{Olivier LE FLOCH}}
_ Our customer base comes from the whole of France, whereas the ventesprivées.com customers are located essentially in the Paris area. Our customers are between 27 and 37 years of age and 37% of them come from mid-range socio-professional categories.



{{Jean PAPILLON}} (President of the French Shoe Confederation)
_ What is the percentage of goods returned? Do you not have competition from the factory outlets which work along the same principle as you, that is to say, discount selling? Is not systematic discounting detrimental to the brands?



{{Olivier LE FLOCH}}
_ We have 1% returns. We are a complement to factory outlets if the brands are only present on a few Internet sites on certain days. In the United States, factory outlets co-exist with the websites.



{{Shirley BANDEL}} (former Levi Strauss employee)
_ Levi Strauss has never worked with websites, as it targets 1 600 000 consumers at the same time. This mass market strategy does not correspond to the brand strategy, where it is preferable to sell excess goods in factory outlets or else destroy the products. Levi Strauss does not sell to these mark-down sellers because of the harm they have done to the brand. Levi Strauss only sells on-line end-of-season firsts (undamaged goods) at discounts of 20 to 30%. This company is seeking to extend its sales network to factory outlets as they are very profitable for the brand.



{{From the floor}}
_ Although the patent policy of the brands is to get rid of their excess stock or previous season’s collections, the volumes are limited and do no harm to the normal distribution channels.



{{Vanessa ZOUZOWSKY}} (ING REIM)
_ How do you manage your volumes?



{{Olivier LE FLOCH}}
_ We never buy less than fifty-off of a product, because it is not profitable to buy less than this amount. So we never advertise an item that will be immediately sold out. We are controlled every two months on this point. We speak of a « good sale » when between 15 000 and 20 000 items are sold. A small sale of no more than 1000 items would cause us to lose money. I don’t know why on the ventesprivées.com site, at 09.03 an item is not available, when the sale started at 09.00!



{{Jérôme MARIE}} (Ville de Troyes)
_ How do you manage unsold stock?



{{Olivier LE FLOCH}}
_ Certain firm purchases may generate unsold stock. Flash sales are organised on the basis of conditional quantities.



{{Frédéric WILLEMS}} (Legal representative of the National Clothing Federation)
_ What does the Fraud Office recommend in terms of price labelling?



{{Olivier LE FLOCH}}
_ Although we do not display a discounted price, we nevertheless are entitled to display the recommended consumer price, crossed out and in parallel our own price.



{{From the floor}}
_ Why are your sales always organised at the same time?



{{Olivier LE FLOCH}}
_ It’s a choice. We also want to set up a VIP club for customers who have bought several products from us, so that they would be able to buy before other people.



{{Vincent LEPERCQ}}
_ What does not sell on Internet?



{{Olivier LE FLOCH}}
_ Seasonality is a major factor. Sometimes, the brand presented is not yet well known enough. In addition, our customers do not buy very specialised brands.



{{From the floor}}
_ Why do some brands stop selling their items on certain sites?



{{Olivier LE FLOCH}}
_ Certain brands have been disappointed by ventesprivées.com which is so well-known that it is no longer represents a private sale.



{{From the floor}}
_ What is the future – up to five years time- of on-line selling?



{{Olivier LE FLOCH}}
_ We intend to develop our export sales.

{{{L’affichage du prix minoré dans les centres de marques et les magasins d’usine}}}


{(Février 2009)}
L’arrêté du 31 décembre 2008 publié le 13 janvier 2009, abroge l’arrêté n° 77-105/P du 2 septembre 1977 pour adapter les annonces de réduction de prix à l’égard du consommateur aux évolutions commerciales, telles que «le commerce en ligne et le développement des magasins d’usine et de destockage » , et autorise la pratique du double étiquetage réclamée de longue date par les centres de marques et les magasins d’usine.

{{Lire l’intégralité de l’article:}}

{{{Les centres de marques : comment échapper au statut des baux commerciaux ?}}}

{(Janvier 2009)}
Les centres de marques, centres commerciaux thématiques apparentés aux magasins d’usines, constituent un nouveau mode de distribution des invendus ; ils présentent notamment la spécificité de centraliser en un seul lieu un éventail étendu de marques, à des prix réduits toute l’année, de l’ordre de moins 30 à moins 70 % par rapport aux circuits de distribution classiques. Aujourd’hui, la quasi-totalité des centres de marques fonctionnent, en matière locative, sur le même modèle que les centres commerciaux, sur la base de baux de type 3, 6, 9 ans. Toutefois, ce type de bail ne répond pas nécessairement aux besoins des promoteurs des centres de marques ni de leurs locataires, bailleurs et locataires s’interrogent sur la possibilité de recourir à d’autres types de conventions…

{{Lire l’intégralité de l’article:}}

{{{ Projets de centres de magasins d’usine autorisés ou à l’étude en Europe (28 Septembre 2007)}}}

{{Plus d’info}}
_ [Tous les centres de magasins d’usine en Europe existants, en projet ou à l’étude->http://www.magdus.fr/spip.php?page=centre&lang=fr]

_ Pour toutes informations complémentaires
_ Contact [->accueil@magdus.com]