Outlet Retailing - Value Retail News

CHINa
Outlet China paints
with its outlet Palette
by lINdA huMPhERS
Editor in Chief
Outlet China’s The Palette Fushan
Outlet China ltd. is ahead of
schedule on the construction of its
first three outlet centers in China.
The centers, going up in Beijing, Foshan
and Huzhou, are the first of 20 outlet
projects planned by the developer during
the next 15 years.
Each center will build out at approximately
100,000 m2 of GLA, of which
75 percent will be a mix of international
and domestic outlet brands ranging
from luxury to mass market. The
remainder of the GLA will include an
array of leisure activities and a large
number of restaurants. The combination
is expected to create a destination
experience that will keep customers at
the centers for an entire day and give
them a reason to return frequently.
The centers will operate under the
brand The Palette. The first to open will
be The Palette Foshan near Guangzhou
in October, followed by The Palette
Beijing in early 2012 and The Palette
Huzhou in mid-2012.
Outlet China has formed a strategic
partnership with UK outlet developer
Freeport, which is providing develop-
20 InternatIonal outlet Journal SPRING 2011
ment, leasing and management expertise.
Freeport operates outlet properties
in the Czech Republic, Sweden and
Portugal. The latter center, Freeport
Outlet Alcochete, is what convinced
Outlet China that Freeport would be a
good partner. The 807,000-sf project is
precisely the sort of retail/leisure/restaurant
mix that Chinese outlet developers
prefer.
“Everyone in China wants to build
mega projects,” Chris Milliken, Freeport’s
commercial director, told IOJ.
“Outlet China came to Europe and
looked at a lot of centers, but felt that
Alcochete has the scope they want and
that Freeport has the experience they
need.”
Milliken says management and
marketing will be key to The Palette’s
success. “In China, shopping centers
are generally developed with the idea of
taking as much cash out as possible,” he
says. “They’ve been somewhat indifferent
to management, and the idea of
marketing, especially in the early years,
doesn’t come naturally. There have been
many outlet projects announced in
China, but there are only a very few that
will meet the internationally accepted
standards of development, tenanting
and operations. But the demand
among Chinese consumers for
outlets continues to grow, so
we expect the outlet market to
become dominated by a small
number of professional operators
who understand the need
for strong management and
marketing.”
The Palette Foshan has
around 55 tenants signed up,
Milliken says, though he declined
to name them yet, citing
sensitivity. “I can simply say
they are international brands
ranging from global sports
names to the most dominant
high-end fashion brands,” he
says. “We have those brands
predominantly through the
support of eight large franchise
groups, which is a great result at
this stage.”
Outlets China is backed by a shareholder
list that includes Beijing Capital
and Singapore Government Investment
Corporation.
Outlet China has also recently
founded the Chinese Chamber of Com-
Outlet China’s The Palette Fushan,
Guangzhou, China
merce Outlet Association. Lin Zhuo
Yan, chairman of Outlet China, is the
founding chairman of the association,
which will primarily serve as a liaison
with the government, set and maintain
industry standards and bring cohesiveness
to the outlet retail industry.
Freeport is working with the association
to create programs and forge links with
relevant chambers of commerce and
with ICSC. `