For Designer Style, It's All Outlet - Value Retail News

McArthurGlen’s Kaempfer
discusses outlets’ future
The industry continues
to evolve and improve,
he said, pointing out
that each country has
its own outlet flavor.
By linda Humphers
Editor in Chief
Anyone who knows J.W. Kaempfer
knows a few things about
him: He’s as close to a modern
day Renaissance man as any of us are
likely to meet; he goes by “Joey,” he
loves to sail, he values loyalty, and he’s
one tough businessman. When he came
to Europe from Washington, D.C., in
1993 to found McArthurGlen Group
and bring U.S.-style outlet centers across
the pond, he already had a successful
company that specialized in developing
first-class urban office buildings.
He has never been one to do anything
in a small way, so naturally he has
led McArthurGlen to become Europe’s
largest developer, owner and manager
of designer outlet shopping villages,
with a portfolio of 20 centers totaling
more than 5 million sf (46,500 m2). It is
the third largest outlet company in the
world, behind Simon Property Group
and Tanger Factory Outlet Centers.
Like most successful entrepreneurs,
Kaempfer brings many interests to the
table, including a passion for architecture,
occasionally even lecturing at
Harvard Graduate School of Design.
Over the past 30 years his companies
have worked with many of the world’s
outstanding architects, including I.M.
Pei and Lord Richard Rogers, as well
as exceptional architects specializing in
historic preservation. Paul Goldberger,
architecture critic for the venerable New
Yorker magazine, wrote, “for people
like Joey Kaempfer...architecture is not a
choice between art and commerce, but a
J.W. Kaempfer
way of embracing both these realms.”
When approached by IOJ, he quickly
agreed to be interviewed, with the caveat
that he might not answer any of the questions.
J.W. Kaempfer always has a viewpoint
– often humorous, always candid and
perpetually insightful – quite unlike anyone
else’s, so IOJ was happy to go along for the
conversational ride. By the way, he ended
up answering most of the questions.
IOJ: You’ve been a part of the
European outlet industry since Day
One. Is this recent tight credit market
any worse than the previous ones?
JWK: We haven’t had a terrible time
getting funding, but it’s taking longer
than it used to. But I don’t know that
we’re typical.
IOJ: Generally speaking, how does
outlet retailing in Europe compare
with the U.S. sector?
JWK: I don’t really know how the U.S.
outlet industry works. When I’m in the
U.S., I visit outlet centers, and we seem
to be completely different. We have a
different design sensibility, a different
lease structure, a different tenant mix,
although there are more crossovers now.
The U.S. is vastly larger than Europe.
When I first started developing outlet
centers in Europe, I was told that we
had to be at last 60 miles from the nearest
department store. In Great Britain
if I went 60 miles, I was already overlap-
iOJ iNTErViEw
ping another department store. Sometimes
I was in another country.
IOJ: How many more outlet centers
and how much more GLA can
Europe absorb? Do you have a feel
for opportunities in Russia? Asia?
Latin America? Where will McArthurGlen
go next?
JWK: I think Great Britain is probably
built out, but there might be a place for
one or two more. Throughout Europe
there are some odd places here and
there that can accommodate another
center. There are a lot of opportunities
in Russia, Asia, Latin America, wherever
there are big populations and wealth. But
would you want to open an outlet center
in Mexico now? No way. Ten years ago
we tried to get a foothold in Russia, but it
was still too early there. We couldn’t make
any kind of deal on a piece of land. So
we walked away. The truth is, we’re not
going anywhere. I personally don’t want
to travel anymore, and when we offered
the chance to younger people in the
company, they chose quality of life. They
didn’t want to go anywhere, either.
IOJ: How long can the outlet gig
keep going? Does it have legs? Is it
really just the flavor of the month,
the passing phase that was predicted
when you first joined the industry?
JWK: It’s not the flavor of the month.
The fact is, stretching dollars is how
people shop now. We see no evidence that
they stop shopping at outlets when they
have more money to spend. When they’ve
bought their kid a great pair of sneakers at
40 percent less, they don’t think to themselves,
“Oh, let’s pay more next time.”
We’re reinventing ourselves as we go.
Our center in Athens gets 4,000 to 5,000
people every Sunday just for the food. The
shops aren’t allowed to open, but people
love coming there with their families, window
shopping, enjoying the great food.
The industry is constantly improving and
giving shoppers what they want. c
Fall 2011 InternAtIOnAl Outlet JOurnAl 17