Outlet Centre International's Designer Outlets Wolfsburg

Outlet Centre International’s
Designer Outlets Wolfsburg

COVER STORY
economic downturn?
Outlets optimistic
By Linda Humphers
Editor in Chief
With so much attention being
paid to the global economy,
it’s little wonder that one
weary retailer threw up his hands and
told a reporter, “It’s the media that’s
talking us into a problem.”
Sometimes blaming the messenger
is appropriate, but when the topic
concerns profitability, most people
are more than willing to chime in with
their disparate opinions on what’s
causing the supposed recession and
what needs to be done to conquer it.
Some have said that online retailing
is the true Big Threat, while
others have said e-tailing will save
their business. Almost everyone said
online retailing’s rise will be meteoric
and needs to be considered, recession
or not.
Some have said that in an economic
downturn brands have to be more
creative and that those with the fastest
supply chains will be the most
competitive. Others have pointed
to the importance of the “natural,”
“renewable,” “sustainable” message
to reach the growing number of ecoconscious
consumers.
As one retailer went on record saying
shoppers are sick of discounts
while others countered that today’s
consumers, “the choice generation,”
are looking for premium value. In
fact, the most commonly heard comment
is that consumers demand a
rewarding shopping experience with
the best deal on the best brands and
the best quality.
While European shoppers visiting
the U.S. are certainly enjoying
the dollar being at an all-time low,
they might have a tough time in a
InternatIOnal Outlet JOurnal SPRING 2008
The success of outlet centres in Poland, such as Fashion House Warsaw (above), gives
industry execs cautious optimism regarding the sector’s ability to withstand a recession.
few months finding European labels
in specialty stores. U.S. specialty
retailers are saying they can’t afford
European goods right
now, but could that
economising translate
into more outlet
stores with more
goods in Europe?
And how much
would a cutback in
American sales hurt
European brands?
Not much, say many of them, who
have been expanding their businesses
in Asia and the Middle East.
To put the fears of a sinking economy
into perspective, consider that
in the U.S. the 2007 holiday selling
season was flat, leading to a prediction
by the International Council
of Shopping Centers, IOJ’s parent,
that some 5,700 U.S. stores will
be shuttered this year. However,
that number isn’t out of line with
store closings in the past, when,
for instance, 5,769 stores closed in
e-tailing
could be
more important
to outlets than
the economy
2004, and 6,890 stores shut in 2001.
So whether the European or global
or U.S. economies head into downturns
or don’t, the
smart money is always
on planning ahead.
As Pascal said, luck
shines on the wellprepared.
Luxury goods analyst
Pam Danziger says
retailers can weather
economic storms with
two factors:
l Increase the amount of time customers
are in the store
l Increase customer interaction
with the merchandise and the staff
Since shoppers already spend much
more time in outlet centres than they
do in traditional shopping venues,
2008 shouldn’t hold too many surprises
for the sector.
IOJ talked to seven European outlet
industry executives about the economy.
Their comments follow on pages
6 and 8. (Continued on page 6)

COVER STORY
(Continued from page 4)
not quite a recession,
but almost
Ken Gunn, Director,
Fripp Sandeman
Partners,
retail analysts
“THe recession
is already
here in terms of the
European property
Gunn industry. We’re seeing
high street occupiers
getting shy and some developments
being mothballed. This must be having
an impact on the financing of schemes,
especially those in Central and Eastern
Europe.
“What is interesting is that we have had
such a long period of economic growth.
There aren’t many survivors left from
the last major recession in 1991. In fact,
most European outlet centres have not
traded through a very severe recession.
Do we have the skills in the industry to
see our way through?
“On the consumer side, the UK is
like the U.S. – suffering from the sudden
removal of credit. We’ve had Northern
Rock bank go under, the Internet’s Egg
Banking cancelling 161,000 credit cards
[7 percent of its customers] and housing
prices stalling, so we are not feeling too
buoyant right now. I’d not quite describe
the situation as a recession – yet – although
Elvi, Dolcis, The Works, ePlay,
Ronit Zilkha, ChoicesUK and Stead &
Simpson have recently gone into administration.
“I’m not sure exactly what’s happening
elsewhere in Europe but I would expect
European Union funding of new member
states to keep Central and Eastern
European economies growing for a while.
Also, consumers in Poland and Romania
are not as dependent on credit as Western
Europeans, so that may help, although if
we all stop buying Skodas in the West, the
credit crunch is likely to spread.
“When times get hard, the Western European
consumer tends to look for good
value, so we can expect the high-street
discounters and mid-priced groups like
Arcadia to do well. Discounting on the
high street tends to benefit outlets as can
be seen during January sales, but these
days, as U.K. outlet centres look increas-
InternatIOnal Outlet JOurnal SPRING 2008
ingly like high streets (and each other), I
don’t think we can be complacent.
“The big concern for me is what happens
if the slowdown lasts a couple of
years? We are in the middle of one of the
most active periods of city-centre retail development
since the war, and with schemes
like Westfield London, Liverpool One and
Cabot Place, Bristol all trying to attract the
same premium customers, outlet centres
may find it much harder to attract shoppers,
particularly if their premium brand/
value for money advantage is eroded.
“I guess we are going to hear a lot
more talk about point of difference,
value of experience and shoppertainment
from the marketing guys. I’d add
delight your customer (old, but still key),
rekindle old flames, take control of key
battlegrounds, convert floating voters
and prune back the dead wood before it
rots the tree.”
Been there, done that
Julia Calabrese,
CEO, McArthur-
Glen Europe, developer
of 15 designer
outlet villages in the
most lucrative markets
in Europe.
“convenTionaL
wisdom says outlets
calabrese
are counter-cyclical,
performing better in a slow economy
when consumers have to tighten their
belts. We do think they turn to us, but we
don’t take for granted that they will. We
are constantly improvising, constantly
monitoring any blip in footfall. We haven’t
seen any major decreases, but we’re always
watching and at the first inkling of a falloff
in traffic, we’re right on it, fixing it.
“We’re also constantly expanding our
centres and our portfolio to meet the appetite
for outlets. Because of our expansion
schedule, we study the economy all
the time.
“We’ve been here for 12 years, and in
that time, we’ve experienced regional – not
global yet – economic downturns. We stay
confident and keep on doing what we do
best, which is getting the brands into centres,
helping them grow their business, and
surprising and delighting the customer.”
“Stay sharp all
the time”
John Drummond,
Managing Director,
The Guinea
Group, developer
of Junction One
and K Village:
“noWadays
you have to stay
sharp all the time,
drummond
not just during a
downturn or during the holidays, but all
the time. Northern Ireland has a small
population and to get revenues from a
small market you have to work it.
“I do a lot of things, most of it nothing
new, but it’s continual. We do a lot of outdoor
advertising and television ads, plus
on-site marketing. We’re spending more
on fashion photography and getting more
coverage because of it. I’ve got quite a
few promotions with brands to get their
names out.
“And we’re expanding the centre all the
time, too. I just stick chunks of new space
on when I get the tenants. Five or six at a
time, that’s the most successful way for us.
That way we won’t have a load of empty
units.
“The important thing is to not stop, to
keep working, all the time.”
“Outlets are perfect”
Brendon O’Reilly,
Partner, GVA
Grimley Outlet
Services, Europe’s
only independent
outlet-centre manager,
with properties
primarily in
Eastern Europe.
o’reilly
“From my perspective
as a property consultant based
in the UK, I can say that in the UK there
certainly is a loss of confidence in the
economy. But I mostly work in Central
and Eastern Europe and there is no economic
uncertainty there.
“Outlets are counter cyclical – when
(Continued on page 8)

COVER STORY
(Continued from page 6)
things get tough and credit is tight, consumers
want value and quality. When the
consumer is trying to get a bit more for
the buck, they look to the outlets. Outlets
are perfect. There is strong demand
for scarce space in Poland and Eastern
Europe, and we are seeing continual
double-digit growth. The growth isn’t
massive, but it’s growth.
“That said, within the centres that we
operate, the main point is to add value
through strong marketing, retail operations
and tenant engineering. When
yields go out, we have to work twice
as hard to add value. We have to have
active plans for rooting out underperforming
tenants, because giving the consumer
a new fresh brand line-up is key.
“A deflated market separates the weak
centre managers from the strong ones,
the ones who have the good relationships
with tenants, the ones who can influence
the retail standards whilst driving conversion
and spend. In Poland we are very
active in making sure that the tenants are
incentivised to bring more product and
provide keen pricing. We have specific
programs that involve the whole centre in
achieving mutual goals, but then we give
store managers and staff something back
for their hard work.
“We won’t see declines if we continue
to offer brands and values.”
Core shopper
not a worry
Desiree Bollier,
CEO, Value Retail
Plc, developer of
nine designer outlet
villages in major
European markets.
“THe recession
fears in the U.S. are
absolutely, definitely
Bollier
making the world
nervous, as are the banking scandals affecting
consumer confidence. The reactions
are normal, but we don’t see these
things having any affect on our villages.
We’ve had an extremely good January and
February, with year-to-date double-digit
increases.
“In January we witnessed a lot of
high street price-slashing, so we worked
closely with our retailers, mirroring the
InternatIOnal Outlet JOurnal SPRING 2008
savings at the outlets while preserving
good margins for our brands.
“Our shopper in general is not the
woman worried about making the mortgage
payment. Those concerns aren’t too
close to her. Our customer isn’t really affected
by what’s happening in the States.
They come from India, South American,
Korea, China, and they have booked their
travel.
“We’re not anticipating a slowdown.
We’re counter-cyclical. We’re a destination.
When the consumer loves good product
but has to cut some corners,
she still wants good quality. Actually we
work very hard. We don’t just have beautiful
centers with the deliveries in the right
place. This business requires constant
attention all the time, not just when people
are worried about the economy.”
Bullish on outlet
retailing
Neil Thompson,
CEO, The Outlet
Company, developer
of Fashion House
Outlet Centres in
Poland
“in PoLand
we’re less concerned
with economic
Thompson
downturn. Growth
is still more than 6 percent. The economy
continues to be stimulated by high investment
and reasonable tax. In addition, in
2007 the Poles working in other countries
re-patriated funds in excess of all the foreign
investment coming into Poland. This
goes straight to disposable income, with a
direct beneficial effect for retail. It doesn’t
look like it will change significantly.
“At the same time Fashion House Outlet
Centres consistently and without exception
outperform national shopping centre visitor
indices by a significant amount.
“Having said all that, the constriction
on the international financial markets,
caused by the sub-prime issues in the
U.S. and general credit crunch, coupled
with increases in Polish interest rates that
were designed to steady growth, have
led lately to a slight deceleration of the
economy. At the same time Fashion
House performance has accelerated,
which points to a counter-cyclical trend in
our outlet centres as customers feel the
need to gain better value, even if their
purses haven’t yet shrunk.
“On a general note we all live in an
increasingly global economy and
any slowdown in a large economy
such as the U.S. is inevitably
felt. However, the more established
Central and Eastern European
countries are now placed to weather
any storm, and, in fact, may now
represent a safer haven for investors
than the more traditional territories.
“From a development and investment
point of view, in the short term
we might have to accommodate the
banks’ increasingly careful mood, but
there is no shortage of good projects
in the pipeline and outlet centres
are looking like a good investment
compared to many of the alternatives.
So for all of the above reasons, we’re
bullish on outlet retailing.”
Fine-tune existing
strategies
cottingham
Phil Cottingham,
Portfolio
Director, Land
Securities, investor
in Gunwharf
Quays, Livingston
Designer Outlet
Center and The
Galleria Outlet
Centre Hatfield
“aT THe momenT, in terms of
our schemes, the outlet spend is holding
up well and we haven’t had any fallout
from retailers leaving – no more than
usual. In the UK, there is consumer
anxiety, mostly due to interest rates and
talk of inflation. The indicators that
interest rates are going down helps.
“Looking ahead is important, and
we have strategies to focus on more
premium brands, plus make sure that
lease expirations are taken care of early,
making sure space stays occupied.
“We have our strategies, and we
fine-tune them, but really, our customers
aren’t the people most affected by
economic downturns. The good news
for us is that those who are the most
affected will start looking to us to maintain
their standard of living.”

WOLFSBURG
oci opens designer
outlets Wolfsburg
By Tom KirWan
Senior Editor
From the start, Designer Outlets
Wolfsburg – which opened
in October last year and held its
grand opening 15 December – has reveled
in being a bit different.
But, then, Wolfsburg is different, too.
A city of 125,000 residents in central
Germany, Wolfsburg is relatively new by
the country’s standards. Only 70 years
old, Wolfsburg was founded in 1938 as
a place where the KdF-Wagen, which
would later be known as the VW Beetle,
could be manufactured.
The 124,000-sf, 40-store Designer
Outlets Wolfsburg took less than three
years to build, something of a history
maker in this country where outlet-centre
building permits are as precious as gold.
“After OCI was awarded the site in a
competition by the city of Wolfsburg,
from day 1 until the grand opening
took less than 36 months,” says Stephan
Schäfer, commercial manager of Outlet
10 InternatIOnal Outlet JOurnal SPRING 2008
Centres International, the centre’s developer.
UK-based OCI is no stranger
to the pressures of opening an outlet
centre in Germany. The company also
developed Designer Outlets Zweibrücken,
a 224,500-sf centre in southwest
Germany that will be expanded by about
50,000 sf this year.
Thus, Schäfer quickly points out that
the three-year window on the Wolfsburg
scheme “included achieving building
permits, clearing the site of old buildings,
and construction of the centre.
With the German planning law being so
restrictive regarding outlet centres, this is
an unbeaten record in Germany.”
Further adding to the Wolfsburg
scheme’s uniqueness is that OCI won
the right to develop the centre in a competition
in which the city fathers chose
the plans. After being awarded the
go-ahead, OCI was able to move quickly,
thanks to the strong support of the city.
City-centre project
Unlike the typical outlet centre that is
designer outlets Wolfsburg is architecturally cutting edge – its 50 stores are contained
in a two egg-shaped, futuristic glass buildings that will be expanded to accomodate 100
stores by 2010.
well removed from a population centre,
Designer Outlets Wolfsburg is right in
the thick of things.
“The site is in the city centre of
Wolfsburg” explains Schäfer, adding
that the property is directly next to
Volkswagen’s Autostadt, an automotive
theme park that is one of Germany’s top
tourist attractions with 2 million visitors
per year. The centre is also next to the
Phaeno Science Centre, which attracts
some 300,000 visitors per year.
With the opening in 2000 of the
Autostadt, VW’s €510 million auto
delivery centre containing individual
museums for all the car brands owned
by VW (including Audi, Lamborghini,
Ugati, Rolls Royce and Bentley), as well
as restaurants and a Ritz Carlton Hotel,
more people had a reason to come to
Wolfsburg.
And now, with the opening of Phaeno
in 2005, Wolfsburg is home to the largest
hands-on science museum in Germany.
This €80 million project, funded
primarily by the City of Wolfsburg, is
adjacent to the main train station, directly
across the middle land canal from
the Autostadt and at the opposite end of
the Porschestrasse from the art museum.
The Phaeno is a dramatic example of
leading edge architecture and construction
techniques, and inside are
more than 250 interactive exhibits and
commissioned artworks considered by
many to be the benchmark for science
museums in Germany.
The outlet centre is likewise an architectural
splendor. Its 50 stores – about
40 of them open – are contained in a
project dominated by two egg-shaped,
futuristic glass buildings that will be
expanded to about 100 stores by 2010.
Inherent attractions
Being the only purpose-built, innercity
outlet centre in northern Germany,
Designer Outlets Wolfsburg has plenty
of lures, too.
“Other attractions, all in walking
distance, include a multiplex cinema, an

indoor waterpark, a 37,000-seat premier
football stadium, an outdoor wakeboard
park and a 5-star Ritz-Carlton Hotel,”
says Schäfer.
“The site is only five minutes away
from the A 39 motorway exit, and it’s
also connected through the central train
stations, which bring you to the Berlin
central station in 65 minutes and to
Hannover in 35 minutes.”
In all, Schäfer figures, 15 million
people live within a two-hour drive of
the centre.
He counts not only Hannover as
being within about an hour’s drive, but
Braunshweig, Magdelburg and Salzgitter.
The two-hour catchment, in addition
to Berlin, includes Hamburg, Bremen,
Leipzig and Kassel.
And there’s an added attraction to being
in one of Germany’s most popular
tourist areas: The government takes a
more relaxed approach to Sundays.
“Being in a tourist area and a tourist
attraction itself, the centre has a
special permit to be open a maximum
of 40 Sundays per year,” he says. “No
other outlet centre in Germany has this
permit. In the whole of Germany, the
opening hours for retail are still restricted
to Monday through Saturday!”
Because Wolfsburg is dominated by tourist attractions, the German government allows
Outlet Centre International’s 124,000-sf scheme to be open 40 Sundays a year.
Tenants at designer outlets Wolfsburg
Atelier Torino
Blue Sprit
Bruno Banani
Bugatti
Calvin Klein Underwear
Carlo Colucci
Centa Star
Cinque
Delmod
Diesel
Dockers
Dyrberg/Kern
tenants like the location
Most impressive about Designer Outlets
Wolfsburg, Schäfer says, is how easily tenants
are drawn to the site.
“The tenants like the location because
it serves the outlet-wise, undersupplied
northern part of Germany while still
being an appropriate distance to the
major shopping hot-spots,” he says.
“The brands don’t interfere with their
flagship stores and their wholesale ac-
FlipFlop
Fossil
Gant
G.K. Mayer Shoes
Hooper´s London
Jet Set
Lacoste
Le Creuset
Levi’s
Marc Picard
Marlboro Classics
Marvelis
Moeve
Nike Factory Store
Oakley
Park Avenue
Puma
Rosenthal
Roy Robson
San Franciso Coffee
Company (catering)
Sarar
Strenesse
Swatch
counts in the high streets of Hamburg,
Berlin or Hannover.”
Business is so good that Schäfer is
looking ahead.
“The centre opened 75-percent let and
is currently 85-percent let,” he says. “Further
tenants will open for the spring/summer
season. Our focus for the leasing of
the last remaining units in phase 1 is on
women’s designer fashion brands. We expect
to be 100-percent leased by September
for the fall/winter season.”
SPRING 2008 InternatIOnal Outlet JOurnal 11

UK OUTLETS
2 uK outlet
schemes on
top 10 list
an analysis of the best shopping
destinations in Northern Ireland
place the country’s two outlet
schemes among the top 10, with Junction
One in Antrim placing third and arch rival
The Outlet in Banbridge placing seventh.
Consumer data released in February by retail
analysts CACI used methodology that
not only takes in customer numbers but
also measures the true market size, as well
as the shopper characteristics and catchment
for each retail centre or high street.
The data is then sorted into more than 40
types of shopping environment according
to retail mix, market positioning and evolving
shopping role.
The four-year-old, 245,000-sf Junction
One has attracted more than 10 million
visitors to its 60 stores plus six cafes and
restaurants. According to CACI, 85 percent
of Junction One shoppers are repeat
visitors, and 86 percent of respondents
said they were “extremely positive” about
their Junction One experience.
Tenants at Junction One include Adidas,
Clockwork Orange, Cosmetics Company,
Ecco/Pierre Cardin, Ellessee/Speedo,
Polo Ralph Lauren, Reebok and Staccato.
Freeport Hornsea:
Phase 3 under way
FreePorT Hornsea outlet shopping
village, on the East Coast of the UK in
Hornsea, East Yorkshire, has started on a
three-phase, €7.9 million redevelopment.
Work on the 12,000-sf phase 1 started in
early January and will be followed by phase
2 later this year.
The redevelopment of the 19-year-old
center, which is taking place in rolling
blocks of three to five units, allows existing
tenants to continue trading with minimum
disruption. About 50,000 sf will have been
added or remodelled upon completion.
Existing tenants will be relocated within the
site during the work. Among the existing
tenants that have renewed leases are Regatta,
Charles Clinkard, Waterford Wedgwood
and Wedding Collection. A 2,600-sf unit
has been taken by Pavers Footwear, which
opened in mid December.
Design and planning of Phase 2 is also
well under way. The project’s owner is
Hornsea Estate Limited.
12 InternatIOnal Outlet JOurnal SPRING 2008
Junction one (above) near Belfast enjoyed an exceptionally busy Christmas season,
posting double digit sales increases as high as 30 percent.
A 45-minute drive south of Junction
One is GML Estates/Orana Group/Land
Securities’ The Outlet at Bridgewater Park,
which opened in April 2007. Timberland,
Vans and Fat Face recently joined the lineup,
bringing The Outlet’s store count to 66
in 205,000 sf. Other tenants in the centre
include Armani, Fila, Jaeger, Murphy & Nye,
Replay, Billabong, Puma, Gap and Jaeger.
For all their rivalry, both outlet schemes
share more than a dozen brands, including
Banana Books, Billabong, Chapelle
more THan 100 new jobs will
be created in Spalding, Lincolnshire
in England thanks to a €14.6 million
expansion under way at the
Springfields Outlet Shopping Centre
and Festival Gardens.
Up to 10 new designer shoppes are
being added to the 43-tenant centre,
plus a 43-bedroom hotel and 10 new
gardens, all set to open in June 2008.
Ian Sanderson, director of Chester
Properties, which manages the
scheme for UBS, says despite tough
retailing conditions during the last
year Springfields has bucked the
national trend for growth.
“This expansion will create more
Jewellery, Claire’s, Cotton Traders, Julian
Graves, Levis, Marks & Spencer, Mexx,
Mountain Warehouse, Nike, Pilot, Ravel,
Thorntons and Whittard of Chelsea.
The Outlet’s drawing power might not
fully blossom until the entire 1.2 million-sf
Bridgewater Park scheme is finished. The
second phase will include a 430,571-sf
retail park, which already has planning permission,
2,000 more parking spaces to serve
the retail site, a 60-bedroom hotel, a drivethru
restaurant and a petrol filling station.
€14.6 million expansion started
at Springfields outlet centre
than 100 jobs and help us and the
region as a whole to attract more
visitors from further afield,” he
says. “Once complete the expansion
will be a real boost for the local
economy.”
Marks and Spencer will take
a significantly larger unit and at
least seven new tenants will be
announced soon, he said.
Springfields attracts 1.8 million
visitors a year. It is home
to festival gardens designed by
Charlie Dimmock and Kim Wilde;
PlayBarn adventure golf course;
and Fenscape, an educational and
interactive history of the Fens.

McARTHURGLEN
Swindon centre earns energy recognition;
East Midlands centre proposes wind turbine
mcarthurGlen’s Swindon Designer
Outlet has been recognised
as one of the most energy
efficient shopping centres in the UK.
Separately, another McArthurGlen
Center, East Midlands Designer Outlet,
plans to build a wind turbine to reduce its
carbon footprint by 50 percent.
The Swindon outlet centre received a
top award at the National Energy Foundation
Awards for successfully reducing
the amount of energy it uses and
encouraging energy awareness amongst
its personnel.
“A recent initiative,” says Nick Williams,
marketing manager at Swindon, “involved
installing solar film systems on our glass
windows, which reduce the sun’s glare and
help us to maintain temperature control,
reducing our air conditioning energy usage
even on the hottest days of the year.”
The award is regarded as a benchmark
standard in energy efficiency by the Carbon
Trust and Energy Institute.
Meanwhile, at East Midlands, a
95-metre tall wind turbine proposed in
planning applications would make the
project the first shopping centre in the UK
to have a wind turbine capable of generating
such a significant amount of sustainable
green energy.
“The wind turbine is a clear demonstration
of our commitment to providing the
3 mcarthurGlen
centres could find
new owners
The ownership of three McArthur-
Glen Designer Outlet Centres
– at Bridgend, Cheshire Oaks and
Swindon – could soon undergo
changes.
The three centres are “owned by a
number of investors through limited
partnership arrangements due to
expire in 2008,” says Chris Green,
McArthurGlen’s marketing director.
McArthurGlen retains a 10 percent
share in these centres and is
1 InternatIOnal Outlet JOurnal SPRING 2008
mcarthurGlen is doing its part for energy efficiency in the UK with a solar film system
applied to windows at Swindon Designer Outlet (below) and with a proposed 95-metre tall
wind turbine for installation at East Midlands Designer Outlet in Mansfield (above).
best possible environment for customers
and our brand partners,” says McArthur-
Glen regional director Henrik Madsen.
“This includes taking responsibility for our
collective impact on the environment and
doing something about it with minimal
impact on the surrounding area.”
Estimates show that the single wind
turbine could save 1,600 tonnes of carbon
emissions each year, the equivalent to the
CO2 produced by 266 households in the
same period.
currently operating as the property
management company.
According to Green, the partnerships
are reviewing the situation.
“There are a number of conclusions
that could be drawn from this review,”
Green says. “These range from dissolution
of the fund – leading to a change
of ownership – to asset enhancements,
changes to the tenant mix and even
medium-term redevelopment. Consequently,
CB Richard Ellis, the real
estate services adviser, has been
instructed by the investors to offer
the properties to the market to assess
the level of interest.”
If the existing limited partner-
ships are dissolved, new owners
would be free to review the current
management arrangements with
McArthurGlen, he said.
“As the UK’s leading manager of
Designer Outlets and with a track
record of success at Bridgend,
Cheshire Oaks and Swindon,” Green
says, “we believe we are well placed
to retain the management contracts
in the event of a change of ownership.”
Besides McArthurGlen, partners
include AXA Real Estate, BP
Investments Ltd, Morley Fund
Management, Mourant & Co. Trustees
Ltd. and Pearl Group.

Luigi Battuello
assumes new post
at McArthurGlen
mcarthurGlen has named Luigi
Battuello as regional director of
its outlet-centre portfolio in Southern
Europe. Battuello has been with McArthurGlen
since
2001, serving as
centre manager
of Serravalle
Designer Outlet
and a key player
in the opening
of the developer’s
Barberino
Designer Outlet
Luigi Battuello
near Florence.
Based at
McArthurGlen’s regional office in Rome,
he will lead the company’s business
in Southern Europe, which currently
includes 83,350 m2 of outlet GLA across
Italy’s Serravalle, Castel Romano and
Barberino designer outlet centres. He
REALM adds key
staff to board
uK-based outlet-centre asset
manager REALM has appointed
Christine Finlay and Angus Fyfe to its
board. Both Finlay and Fyfe joined
REALM as leasing
managers in
2004. Finlay will
become Leasing
Director; Fyfe will
become asset
m a n a g e m e n t
director. Gordon
Gabbani will now
concentrate his
full attention on
the retail operations
and marketing
side of the
business under
a newly created
role of commercial
director.
Finlay will
assume executive
responsibil-
christine Finlay
angus Fyfe
replaces Giovanni Galbiati, who resigned
to spend more time on personal pursuits.
Battuello will report to McArthurGlen’s
CEO Julia Calabrese, who said, “Luigi has
been instrumental in growing the business,
overseeing the number of stores at
Serravalle increase to 180 from 60. This
uplift contributed to a €200 million turnover
for the Serravalle business, which is a
remarkable achievement.”
Prior to joining McArthurGlen, Battuello
was at Swiss-based Dufry (previously
the Weitnauer Group), one of the biggest
players in the duty-free industry. During
his seven-year term at Dufry, he played a
pivotal role in managing the company’s
duty-free and duty-paid outlets across
several Italian Airports.
“I’m looking forward to growing our
business further in Southern Europe and
fulfilling the needs of our 700-plus brand
partners,” Battuello said. “I will be looking
into opportunities to maximise our
full potential at existing sites and expansion
into new territories.”
McArthurGlen plans to open centres
in Venice and Naples within the next two
years.
ity for all core asset management
development LED leasing and all
non core external leasing instructions.
In addition she will work with
Colin Brooks, REALM’s managing
director, on the evaluation of new
business opportunities in the UK
and mainland Europe.
Fyfe will assume executive
responsibility for business plan
delivery on all core UK asset management
leasing activity to include
tenant mix management and lease
renewals. Gabbani’s role will be to
deliver additional rent to the business
through the optimum co-ordination
of retail operation/marketing
activities.
Also joining REALM is Andrew
Duncan, who assumes the role of
head of marketing and communications.
He replaces Steven Farrant,
who has emigrated to New Zealand.
Duncan was previously with Lee
Baron, based in Manchester.
Previous to that he had marketing
agency experience, proceeded by 13
years in the retail jewellery business
with Boodles and Goldsmiths.
GLOBAL PEOPLE
Outlet analyst
Ken Gunn joins
Fripp Sandeman
Ken Gunn, well-known in the European
outlet sector for his feasibility
studies and tenant-mix analyses, joined
Fripp Sandeman Partners in March as the
company’s fourth director. He was previously
founder and
associate director
of CACI’s
Property Consulting
Group, a team
of 10 specialists
focused on the
international real
estate industry,
working with
Ken Gunn
GVA Grimley
Outlet Services,
Henderson Global Investors, Land Securities,
McArthurGlen, Freeport, REALM,
Guinea Group and others.
At FSP, which is based about 35 miles
northeast of London in High Wycombe,
Gunn will continue his consultive
approach to analysis, working with
investment funds that include Morley,
UBS, Prudential, Legal & General and
Hermes.
“The plan is to merge FSP’s consumer
marketing/asset management skills with
my outlet experience,” Gunn told IOJ, “so
I will just be wearing a different hat rather
than leaving the industry.”
Burlton joins Cushman
& Wakefield
mark Burlton, formerly leasing
director for the UK and France
at McArthurGlen, has joined Cushman
& Wakefield as a partner and head of
European retail tenant representation.
Prior to McArthurGlen, Burlton was
European real estate director for Ralph
Lauren and for Foot Locker.
Cushman & Wakefield works with
over 500 retail clients on their real estate
strategies. Burlton will report to Boris
van Haare Heijmeijer, head of retail in
continental Europe, and John Strachan,
global head of retail.
Strachan said, “Mark’s appointment
will enable us to build further on our
relationships with retailers to capture
the flow of business as they increasingly
cross borders within Europe and
beyond.”
SPRING 2008 InternatIOnal Outlet JOurnal 15

BICESTER VILLAGE
Bicester’s success secret:
Details, details, details
By Linda Humphers
Editor in Chief
Possibly the highest-producing
outlet centre in Europe with sales
over €1,000 per square foot, Value
Retail’s 13-year-old Bicester Village is just
what Mies van der Rohe meant when he
said “God is in the details.”
At this busy, vital outlet village, buzzing
with shoppers even on a drizzly Tuesday
afternoon in October, little seems left
to chance. The management offices,
on a level overlooking the centre’s main
concourse with a bird’s eye view of the
shops, is likewise buzzing with activity as
staff keeps the gears rolling smoothly for
operations and marketing.
“We do everything in-house,” says Chris
Rycroft, who as the village’s retail director
heads a six-person team whose primary
purpose is to work with tenants.
The everything in-house statement
makes sense, especially as Bicester Village is
deep in construction on a 40,000-sf phase
3 due to open in late August or early September.
Expansions can be disruptive on
many levels, for shoppers and tenants alike.
So the Value Retail tenant team focuses
on maintaining that balanced level of serenity
and urgency while the developer devises
ways, such as a temporary two-level car
park and hedges, to make the construction
invisible to shoppers. When the expansion
is open, Bicester Village will total 222,000 sf,
and have added a stream, an eco zone, and
30 more tenants to the 103 already in place.
Given the waiting list for tenant space
at Bicester Village, one would think that
adding 30 tenants would be a breeze.
While Value Retail doesn’t deny that
having a waiting list is a nice position to
be in, Helen Pask, group leasing and commercialisation
director, is quick to point
out that successful tenanting “is all about
choosing the right mix.”
She and Rycroft said that continually refining
the small-space brands is highly important,
whether it’s to move the brand to
a different location in the village or into a
different size space (Donna Karen downsized;
Mulberry upsized) or to simply say
good-bye. In 2006, they said, about 25
percent of tenants were replaced.
“What’s interesting now,” Pask says, “is
1 InternatIOnal Outlet JOurnal SPRING 2008
one of the busiest outlet centres in Europe, Bicester Village is adding 40,000 sf,
bringing the scheme to 222,000 sf. The centre is 100 km northwest of London.
that we’re getting demand for retailers not
normally found in outlets.”
Always listening to shoppers, Value Retail
researches these longed-for retailers to
understand where they are in the market.
“We want longevity,” Rycroft says. “We
don’t like to say good-bye, and we don’t
like unpleasant surprises.”
Once Value Retail is comfortable with a
brand, its retail team helps bring it into the
outlet fold. Rycroft lists a few brands that
have graduated from a test store at Bicester
Village to permanent tenancy:
n Loro Piana, known for high-end
cashmere and other expensive fabrics
n Anya Hindmarch, maker of handbags
ranging from whimsical to utterly luxurious
n Agent Provocateur, Vivian Westwood’s
raunchy underwear, whips, masks
and gloves
n Jimmy Choo, amazing shoes
n Jack Wills, a UK Abercrombie
n Bonpoint, incredible children’s fashions
from France
A fresh brand mix is important, Rycroft
says, since “most customers aren’t mas-
sively loyal.”
They shop the whole village, he says,
with most staying for four to five hours
discovering the diversity of brands scattered
throughout the village.
“We don’t zone tenants,” he says. “We
don’t believe in it and try not to do it. We
prefer the shopper find surprises in the
center. Convincing retailers of this can
take some time,” and it does create some
interesting juxtapositions, such as Dior
next to Timberland, Tommy Hilfiger next
to Zegna, Diesel next to Savoy Taylors
Guild, Musto next to Mexx.
But judging from Bicester Village’s sales
performance and the fact that it has the
second-highest VAT density in England
(central London has the highest), its
shopper has clearly embraced the eclectic
concept.
Thirty-five percent of Bicester Village’s
shoppers are international, and one in five
Chinese tourists to the UK visits the centre,
which is 100 km northwest of London, in
Oxford. Though Value Retail is a heavy international
marketer, 30 percent of the centre’s

Bvs breaks ground
in Landquart
march was the scheduled date
for the official groundbreaking
of Alpenrhein Outlet Village,
located in Landquart, one hour east of
Zurich and close to Liechtenstein and the
German and Austrian borders.
Monaco-based BVS Outlet Villages
is responsible for the concept, design,
marketing, leasing and management of the
21,000-m² scheme, which will be developed
in one phase. Other members of the joint
venture include ING Real Estate Germany
and MIAG Mutschler Immobilien.
BVS chairman Robin Behar said that
he learned to ski in Landquart when he
was seven, thus he has a strong appreciation
for the potential success of an outlet
centre there.
“We believe in the strong link between
tourism and outlet shopping,” Behar told
IOJ. “Unlike standard shopping centres,
which respond to the daily and weekly
needs of their immediate local catchment,
outlets draw customers from considerable
distances, often from over two hours away,
often only once or twice a year.
“But unlike standard shopping centres,
you rarely see a car arrive at an outlet village
with just one occupant – usually it’s
the whole family, or a group of ladies on
an outing, and they’ve decided to make a
BicesTer CONTINUED
customers live within a half-hour drive.
“The local shopper is our core,” Rycroft
says, “but the tourist is the icing on the
cake. For many of our retailers, 30 percent
to 50 percent of sales come from international
visitors.”
As a retail director, Rycroft works to
ensure that brands evolve in the right
way, he says, so that they can constantly
improve their business, and not just in the
outlet sector. “Their success at high street
is important to us.”
So the day after a new brand opens in
Bicester Village, “We’re knocking on their
door,” Rycroft says, “with anything they
need – mystery shoppers, training, visual
merchandising, marketing – and it’s all optional,
supplementary to what the brands
already do. There’s just a lot of interaction
between staff and stores.”
He might add, success is in the details.
day of it, and that’s why we’re designing
this centre to be a Swiss tourist destination.”
Behar said at least 30 percent of visitors
to outlet centres continue spending
in towns and high streets. “If we attract
1.5 million to 2 million visitors a year,” he
said, “we could put an extra half-million
customers onto the local streets, bringing
opportunities for local tradesmen, craftsmen,
entrepreneurs and amusements.”
When completed in spring 2009, Alpenrhein
Outlet Village will have 100 shops
with a brand mix of 50 percent international
labels and 50 percent German/
Swiss/Austrian brands, with 50 percent being
fashion apparel, 30 percent being casual,
outdoor and sportswear, and the remaining
20 percent in all other categories. There
will also be one major restaurant and several
other catering options. Two-thirds of the
1,200 parking spaces will be covered.
Within a 90-minute drive of the scheme
are nearly 4 million people with above
average income levels, probably due to the
2.1 million overnight visitors who annually
come to the famous ski resorts as well as
the luxurious Bad Ragaz spa, just down
the road from Landquart. Heidiland, only
10 minutes from the BVS site, attracts
260,000 visitors annually.
Easily accessible, Alpenrhein Outlet
Village is on the A13 motorway, one of
the major north-south arteries through
the Alps for 13.7 million vehicles a year.
There will also be two underpath walkways
from the centre to the Landquart train
station, which is a major Swiss stop for 5.7
million travellers annually.
Gloucester Quays on track for 2009
The uK’s newest outlet centre is
about one year away from opening
with 50 percent of lettings in the pipeline,
according to Franko Muccini, manager
of the Peel Holdings’ scheme.
Peel won’t yet reveal names of the
new tenants for Gloucester Quays but
describes the scope of the project as
a 60-acre £522 million development
that will include 100 outlet stores in
200,000 sf. The 1.5 million-sf mixeduse
development will also include 12
to 18 mostly waterside bars and cafes,
two hotels (budget and prestige), a
grocery superstore, leisure and office
facilities, and 1,000 residential units.
Gloucester Quays is currently one
of the largest mixed-use waterside
regeneration developments in the UK
and part of a £1 billion regeneration
of this historic city.
Muccini says that the outlet centre will
feature upper-end, not premium, brands.
“We are after quality, not quantity, and
we’re talking to proven operators with
good customer service,” he says.
Muccini spent 13 years at McArthur-
Glen, where he launched seven outlet
centres including Swindon, Livingston,
Bridgend and Mansfield.
Opening is slated for 9th April
2009, by which time says Muccini, the
supermarket and budget hotel will
all be open. Remaining phases of
the development, including the new
homes, will be completed by 2013.
SPRING 2008 InternatIOnal Outlet JOurnal 17

AROUND THE GLOBE
Old friends, new owners in Messancy
HenDerSOn GlOBal Investors, which
operates the European Outlet Mall Fund,
and McArthurGlen, developer, owner and
manager of 15 outlet villages across Europe,
said in March that they had acquired Invest
Retail’s 18,500-m² outlet scheme in Messancy,
Belgium. The purchase price was €12
million. The centre, which currently has 48
tenants, is in a strong catchment area that
borders France, Germany and Luxembourg.
The sale took place in November, 2007,
according to to Invest Retail’s consolidated
report for the year, as well as online real
estate journal europe-re.com.
This acquisition builds on an existing
partnership between two industry giants:
Henderson’s four-year-old outlet-mall
fund owns eight outlet centres in Europe,
all of which are managed, marketed and
leased by McArthurGlen.
Plans for the Messancy scheme include
a substantial refurbishment programme
to enhance the retail offer and create a
regionally dominant centre that will take
advantage of the affluent catchment
profile. Tenants in the five-year-old centre
include Champion, Kipling, Lingerie
Shop, Levi’s/Dockers, Miss Sixty-Energie,
Morgan, Nike, Oakley, Pepe Jeans, Tommy
Hilfiger and VF.
“We have a well-established history in
managing outlet centres and delivering
n princess Outlet Center opened
100-percent leased in Sofia in
December. The €5 million project is a
reconstruction of the former Corecom
store in Sofia’s Mladost 4 district.
The first outlet center in Bulgaria,
Princess covers 12,600 m 2 and
includes 120 parking places. The first
floor offers outlet stores and a cafeteria,
while the second floor contains
Fun City, an entertainment area that
includes 15 bowling lanes, gaming
machines, darts, video games, a children
playground and a restaurant.
The biggest store in the center, at
about 1,000 m 2 , is CruppoFiori, which
represents 15 international brands,
including Carpisa, Ferrone, Onix,
RoccoBarocco, Bon Bon, Valentino,
1 InternatIOnal Outlet JOurnal SPRING 2008
maximum returns for our brand partners
and investors,” says Julia Calabrese, CEO
of McArthurGlen UK. “This acquisition
strengthens our portfolio in central
continental Europe and opens up a new
geographical area for us and our brand
partners in terms of outlet retailing.”
Neil Varnham, Director at Henderson
Global Investors, said: “The european
outlet mall sector continues to offer
sofia, Bulgaria: 1 opens, 1 starts
Henderson and mcarthurGlen plan to invigorate Factory Shopping Messancy with
new tenants and marketing, all designed to attract the catchment’s affluent shopper.
Talco, Oxer, Shake, David Mayer, Guts
and Brooks. Other tenants include
Adidas, Playlife, Replay, Rifle, Hot
Spot, Toi & Moi, Gola and Camper.
n Sofia Outlet Centre, a development
of K&K Electronics,
Bulgaria’s largest electronics retail
group, got under way in December.
The 28,000-m 2 centre is on Sofia’s
east-bound Tsarigradsko Chausse
Boulevard. The project, which will
have one floor below ground and
three above ground, is set for completion
in 2009. Space has already
been pre-let to brands including
Kenvelo, Adidas, Tom Tailor, Geox,
Reply and Levi’s.
GVA Grimley Outlet Services will
operate the centre.
good investment opportunities and we
will continue to drive turnover growth at
our assets and to fuel tenant demand.”
Properties in the European Outlet Mall
Fund are in Parndorf, Austria; Messancy,
Belgium; Roubaix and Troyes, France; Berlin,
Germany; Serravalle and Castel Romano,
Italy; and Roermond, The Netherlands.
McArthurGlen developed all the centres except
for the ones in Belgium and Germany.
Jv to develop
Parc du cubzac
Outlet SpeCIalISt Pantheon Retail
in October signed a joint venture agreement
with Revcap and Kenmore Property
Group (whose portfolio includes
Zweibrücken Factory Outlet Centre in
Germany) to develop Parc du Cubzac in
Gironde, France.
Pantheon Retail currently manages
Castel Guelfo Outlet near Bologna, which
recently started phase 2 of its development,
bringing the centre to 25,000 m²
upon completion later this year. Pantheon
also manages the development of Roncade
Outlet Gallery near Venice, Italy.
The 13,050-m² phase 1 is scheduled to
open in the second half of 2008. The
overall project will build out at 33,500
m 2 , including 130 shops, four cafes and
restaurants as well as a children’s play
area and a 1,500-m 2 national visitor attraction
to promote local tourism and the
wineries in the Bordeaux region.

2007 successful
for Fashion House
outlet centres
tHe numBer of customers who
visited Fashion House Outlet Centres
in Poland reached 13 million in 2007.
According to the most recent report
by Fashion House Outlet Centres, the
steady increase of visitors is not the only
piece of good news from the Polish
outlet market.
Fashion House Outlet Centres also
recorded considerable growth in tenants’
number. Fashion House Warsaw started
in 2005 with 45 outlet stores and ended
2007 with almost 100 stores. Almi
Decor, Villeroy & Boch, Timberland and
Italian Stefanel located their very first
outlet stores in Poland in Fashion House
Warsaw.
“Comparing the population of
Poland, which is more than 38 million,
with the total number of Fashion House
Outlet Centre’s customers, I can say that
more than every third Pole is a visitor of
our outlet centres,” says Neil Thompson,
CEO of The Outlet Company, which
developed and now manages the Fashion
House Outlet Centres. The centers were
acquired over the last six months by
Pelonia Property Fund II, a subsidiary
of AIB Capital Markets.
All Fashion House Outlet Centres are
leased by CB Richard Ellis and GVA
Grimley Outlet Services, the latter of
whom operates the centres.
A snapshot of the Fashion House
Outlet Centres in Poland reveals:
n Fashion House Sosnowiec is now
being expanded and when completed
in September will comprise 16,700 m 2 ,
consisting of 956 parking places and 80
stores. From its opening in 2004 through
the end of 2007, the centre was visited
by almost 6 million people, which is 1.5
million more than the Fashion House’s
total catchment.
n Northern Poland’s only outlet
centre, the 9,460-m² Fashion House
Gdansk, has been open since October
2005 and has been visited by 3 million
people, almost double the catchment’s
1.7 million people. Sales at the centre in
2007 grew 66 percent compared to 2006.
n Fashion House Warsaw is 17,272
m 2 , consisting of 100 outlet stores and
960 car parking spaces. Since its opening
in 2005, the centre has been visited by
almost 4 million people.
Fashion arena outlet center in Štěrboholy, near Prague in the Czech Republic,
opened in November 2007 with a range of brands including Nike, Mango, Salamander,
Adidas, Levi Strauss, HIS Wrangler Lee, Pietro Filipi, Gas, Jet Set, Park
Avenue, Marc Picard, Tchibo, S Oliver Shoes and many others, plus 12 restaurants.
The 18,000-m² center is a joint-venture of TK Development and LMS Outlets, with
GVA Grimley Outlet Services handling operations.
Want customers? Tap trendy shopaholics
muCH OF tHe amerICan attitudes
toward shopping has rubbed off on
Poles, according to a study conducted
in June by Pentor International
Research, at the request of Fashion
House Outlets.
According to Pentor, the study’s
1,000 participants fell into five
groups:
n Cautious pragmatists (31 percent)
are very even-minded shoppers
who don’t act on impulse. Guided
by rationality and practicality, they
prefer to buy one high-quality item
rather than several items of lower
quality. Brand is the guarantee of
quality for them.
n trendy shopaholics (29 percent)
like to shop. They enjoy buying
and do so often. More than any other
segment they attach importance to
fashion trends and the uniqueness
of items they select. They are also
brand-conscious. They are not particularly
price-sensitive and stand
ready to pay more for branded goods
of high quality. Sales and discounts
give them a sense of savings.
n alternative bargain hunters
(18 percent) are the biggest enthusiasts
of promotions and sales, firmly
believing that good products don’t
have to be expensive. They seek
treasures among non-branded, cutprice
and used products, and they’ll
will wait for a discount.
n Snobbish connoisseurs (11 percent)
rely on their own refined tastes
and items they choose must be comfortable,
of high quality and visually
attractive. Price is not an issue; they
buy the items they like immediately,
not waiting for markdowns.
n thrifty ascetics (10 percent)
have the lowest spending power and
are the most price-sensitive. They
do not spend much time analysing
the value-for-money ratio. They buy
goods based on price, not quality.
Their savings consist chiefly in limiting
their purchases.
Clearly, the core target for outlet
centers is the trendy shopaholics
segment, followed by the alternative
bargain hunters and snobbish connoisseurs.
SPRING 2008 InternatIOnal Outlet JOurnal 19

OUTLET MARKETING
Citygate Outlets scores
an ICSC Maxi Award
By ritesh Gupta
Contributing Writer
From January of 2006 through
May of 2007, Citygate Outlets went
on a campaign to introduce the
outlet-retailing concept to Hong Kong.
The effort was so successful on so many
levels that the centre and its Happy Ambassador
campaign has been honored with
a 2007 Maxi Silver Award from the International
Council of Shopping Centers.
The marketing campaign helped
Citygate, originally a mixed-use centre in
the new town of Tung Chung in 1997,
become Hong Kong’s first – and so far
only – dedicated outlet centre.
The five-level, 336,000-sf centre, which
opened as Citygate Outlets in 2006, is owned
by Newfoundworld Site 2 (Retail) Limited.
a business decision
“Citygate Outlets’ award-winning campaign
was not just a good marketing case
but a very successful business case,” says
Tim Jones, senior portfolio manager of
Swire Properties, which manages the centre.
“The campaign was well-considered
and it integrated a variety of marketing
tools. It was cost-efficient and creative,
with proven results in leasing, revenue
and footfall.
“And the fact that we introduced a new
retail concept to Hong Kong gave us the
honour of being the first Asian shopping
centre to win the ‘Category Integration’
silver award.”
In addition to introducing outlet
shopping to the Hong Kong market, the
Happy Ambassador also helped leasing
efforts and re-branded the centre for both
local and overseas shoppers.
“As the first outlet mall in Hong Kong,
overcoming consumers’ varied misunderstanding
of outlet malls was crucial,”
Jones said. “Locally there was no outlet
mall, only outlet stores. Therefore, one of
the key tasks was to portray outlet shopping
simply and universally, regardless of
shoppers’ previous perception of outlet
malls or even their language.”
During the initial transition from a mixeduse
centre to an outlet mall, Jones said, the
campaign was used to keep the neighborhood
informed of changes as they hap-
20 InternatIOnal Outlet JOurnal SPRING 2008
With its successful branding campaign, Citygate Outlets became the first Asian centre
to win the “category integration” Maxi Silver Award.
pened. For instance, the new name Citygate
Outlets and copy explaining the nature of
outlet retailing was placed on storefronts for
interested locals to read.
Other parts of the campaign – also
aimed at Hong Kong residents – included
leaflets and lifestyle magazines that
listed reasons to visit the centre without
being disappointed by the small quantity
(about 20) of outlet shops after a long
trip, Jones said.
A media luncheon re-branded and repositioned
the centre. To capture tourists,
a Web site was launched in December
2006 before the full-line ad campaign
started. Working with the local tourism
board was also key.
“When the centre was about 80-percent
occupied,” Jones said, “we created a
thematic campaign to launch the centre,
educate what outlet shopping is, soften
the distance issue and differentiate Citygate
from future outlet competition.”
“a pleasure hunt”
On the creative and media mix, he said,
“The branding campaign ubiquitously surrounds
the target audience from pre-arrival
downtown to touch points at the center.
Additionally, a road show in key subway
stations explained outlet shopping and
distributed Citygate coupon books. Print
ads, outdoor bus panels, 30-second radio
ads, special weather report buys, subway
in-train stickers and in-mall collaterals
were also used.
Key brand names in Citygate Outlets
were highlighted and imagery depicted
outlet shopping as a relaxing experience.
The campaign’s tagline was upbeat: “It’s
a pleasure hunt.”
Jones says the campaign hit its mark.
“Footfall has shown huge improvement,”
Jones says. “A 50-percent increase
was monitored in April 2007 compared to
the pre-outlet period. Also, year-on-year
revenue has increased by 60-percent as
recorded in May 2007. In terms of marketing
success, a total of 124 editorial mentions
(audio and print) were monitored over
the period of August 2006 to May 2007 in
Hong Kong and overseas. More than 2,000
mentions were captured in Yahoo and key
travel sites such as tripadvisor.com. And
fodors.com has included Citygate Outlets in
Hong Kong’s attraction list.”
Behind the campaign was Templar, a
small local agency. The media agency was
Maxus, an international agency within
Group M. The Web site agency was Rice
5, and PR was handled by Chung & Tang,
another local agency.

BEYOND EUROPE
Turkey embraces outlet shopping
considering their heritage as
bargain hunters, it should come as
no surprise that Turkish shoppers
have embraced outlet shopping. Demand
in the country for outlet centers may push
the number there to 30 from 19 in just the
next two years. To further attract shoppers,
and to take advantage of the natural
kinship between tourism and outlets, developers
are now beginning to add hotels
to their outlet schemes.
Among the new outlet/hotel projects
under construction are Via/Port,
Bayrampaşa Outlet and Varan. Ulusoy
Susurluk Outlet Center, which opened in
2006, is also planning to add a hotel.
Commenting on the Turkish view of
outlet shopping is Avi Alkas, general manager
of Istanbul-based Alkas Danismanlik.
Alkas points out that when people are away
from home, they spend more money. “So
now we plan to organize three- to four-day
shopping tours to outlet centers.”
Outlet centres currently account for about
10 percent shopping centre GLA in Turkey,
and the sector’s footfall has been growing by
double digits for the last several years.
In 1997 Bayraktar Holding opened
Turkey’s first outlet center, the 304,543-sf
İzmit Outlet Center, which enjoys more
than 6 million visitors annually. Emintas-Ileri
Mensucat’s 363,200-sf Istanbul
Olivium Outlet Center, which opened in
2000, and Umraniye Olivium Outlet Center,
which opened in 2007, likewise draw
The 2 0-store Dubai Outlet Mall, which opened in August 2007, is proving to be a
hot international attraction. Several hotels have developed shopping tours that regularly
bring international shoppers to Al Alhi Group’s 1 million-sf mall.
22 InternatIOnal Outlet JOurnal SPRING 2008
demand for outlet is heating up in Turkey. Pictured are two of the country’s most successful
outlet centres, (above) Olivium Outlet Center in Istanbul and (below) Izmit Outlet
Center in Izmit.
millions of shoppers annually.
There is one change in Turkish shopping
habits: Most credit card companies
have toughened up their installment
payment policies. Experts there say that’s
good news for the outlets, because when
people want to wear branded clothes,
they’ll look for a way to pay less for them.
indian firm
to ramp up
stores, centers
arvind mills says it will ramp up its
retail operations in India to include more
outlet stores and outlet centers.
Arvind Mills, which currently has 70
Megamart retail stores across India selling
multi-brand apparel, plans 200 more outlet
stores in next four years, besides introducing
a larger format Megamart Outlet Centres in
the top 20 cities via 30 new outlet centres.
The first Megamart Outlet Centre of
about 30,000 sf came in December 2007
in Chennai, to be followed by stores in
Hyderabad and Pune.
About eight outlet centres and 125 small
format stores would be opened by the end
of next financial year.

BEYOND EUROPE
Dress-Smart–Hornby to grow
dress-smart Outlet Shopping
– Hornby in Christchurch, New
Zealand is celebrating its 10 th
anniversary by starting its second major
expansion in three years.
Anthony Bertoldi, CEO of ING Retail
Property Fund Australia – which owns the
centre as well as the Dress-Smart centres
in Onehunga in Auckland and Tawa
in Wellington, New Zealand – says the
expansion announced in late February will
be a significant one.
“The expansion will see the centre
increase by more than 50 percent (about
2,250 m 2 of retail space), creating between
15 and 20 new stores,” Bertoldi says. “It
is expected that this growth in turn will
create in excess of 30 new jobs.”
Mark Schiele, chief executive of Prime
Retail Management Limited, which manages
the Dress-Smart portfolio, said that the
Christchurch project is a popular centre.
“The centre attracts shoppers from
Christchurch and surrounding regions,
plus other mainlanders and tourists from
further afield,” Schiele says.
“Retailer demand is both from our tenants
who approached us to enlarge their
tenancies, and from new tenants who want
to open a store in the complex,” he says.
Hobart Airport project
abandoned, resurrected?
The developer of a proposed
outlet centre near Hobart Airport
in southeastern Australia has
decided to proceed with the scheme after
just a few months ago pulling out of the
development.
The retail development by Austexx
stalled in October after the federal government
imposed size restrictions on the
100-store, 18,000-m 2 project, limiting it to
10,000 m 2 .
But Clarence Mayor Jock Campbell in
February confirmed the development was
back on the track and was likely to be open by
Easter 2009, according to Mercury, a Tasmania
newspaper.
He said Austexx had “rejigged” the original
proposal to fit the smaller scale and had
received approval to start the project.
To come full circle, Austexx hasn’t confirmed
it has resumed the scheme since
abandoning it in October.
The 5, 00-m 2 scheme will grow by 2,250 m 2 and will add between 15 and 20 new stores
to its current 50-store base.
The expansion of the centre, he says, is
part of a strategy “to continue to improve
the core offer of well known brands at
outlet prices as desired by our customers.”
Construction at the centre was to begin
in March and is expected to be completed
The old Beenleigh Tavern on
the eastern coast of Australia is
being transformed into a €56.2
million outlet centre by a Gold Coast
businessman.
Work is under way on the 14,000m
2 project, to be called The O.C. @
Exit 35, and is set to be completed
by October.
Developer John Quinn, of the Quinn
Group, says the project – near the
Dreamworld, Movie World and Wet N
Wild theme parks – has drawn strong
interest from prospective tenants.
“Our tenant mix is, by design, at
the upper end of the retail spectrum,”
he said, “and we believe this
will offer a shopping experience for
in November this year.
The outlet centre opened in 1998 in a
converted supermarket.
The centre has 50 stores totalling 5,400
m 2 of retail space with three levels of
parking for 260 cars.
conversion near Brisbane
set for autumn completion
locals, visitors and tourists that will
be without peer.”
The centre will have more than 70
stores as well as coffee shops, kiosks
and a food court with a large outside
deck. Retail spaces will range from 60
m 2 to more than 1,300 m 2 .
The development will have more
than 800 car parks, including 280
under cover, as well as easy access
from a major highway, high visibility, a
children’s playground and an enclosed,
air-conditioned mall environment.
Beenleigh is about 35 kilometers
south of Brisbane, where the resident
population in 2004 was 1.8
million, according to the Australian
Bureau of Statistics.

WITH THIS IN MIND...
Outlet competition
has a familiar ring
By chris Green
Marketing Director,
McArthurGlen
in the Winter 2008 IOJ, James
Kirby of Henderson Global
Investors argued persuasively that
“outlet centres are counter cyclical
and tend to out-perform other retail
sectors in an economic downturn.”
That’s a comforting idea given the
current state of the global economy.
However, before you
put your feet on the
desk and breathe a sign
of relief at being in the
right sector at the right
time, Kirby also warns
that outlet centres must
“retain their point of
difference to maintain
their success,” and
here, as they say, is the
rub. If we agree that
the outlet centre unique
selling proposition
(USP) is brand names
and designer labels at
discounted prices, then
I’d argue that our point
of difference is under
threat like never before.
Competition within our own sector
has never been fiercer, with some
industry insiders worrying that the
growing number of schemes actually
threatens our concept’s unique proposition.
If that is true, then 2008 will be
an interesting year as more new centres
are set to open than since the concept
landed in Europe.
If that were not enough we are also
seeing our USP eroded by the growth
of low-price fashion brands such as
the Swedish chain Hennes & Mauritz,
the Spanish chain Zara and the UK’s
Top Shop and Primark chains. If you
don’t believe me just look at how the
Zara concept is described by its parent
Inditex:
“Zara is a high fashion concept
offering apparel, footwear and accessories
for women, men and children,
from newborns to adults aged 45. Zara
stores offer a compelling blend of
2 InternatIOnal Outlet JOurnal SPRING 2008
fashion, quality and price offered in attractive
stores in prime locations.”
It may not be snappy, but it certainly
sounds familiar. And they’re not alone
with Primark trading under the strapline
“Look Good Pay Less.”
If this hasn’t raised your eyebrows,
another challenger for the outlet USP is
the burgeoning acceptance of Internet
shopping, which has successfully defied
the long-held assumption that customers
will not buy
clothes online.
In the U.S., reluctance
to purchase
clothing on the
Internet is fading
fast according to
Forrester Research
(E-Commerce
Times, 14 May
2007) due to better
shopping tools and
friendlier return
policies. Online
apparel purchases
have now overtaken
the computer hardware
and software
category, accounting
for €15 billion in sales. The picture
is similar in the UK where online
shopping is predicted to quadruple
by 2020 when it will account for 40
percent of all UK retail sales, up from
just 2 percent in 2002 (www.guardian.
co.uk, 16 February 2007). The picture
is likely to be repeated across the EU
as broadband access grows from 44
percent of households today to 71
percent by 2013. (Bizreport, 08 January
2008).
The Internet has already transformed
how we purchase books, music and videos,
and it happened almost overnight.
Online apparel shopping has taken a
bit longer, but consumers are responding
to the combination of choice and
discounted prices. How familiar does
that sound?
chris Green
“With This In Mind” is a new IOJ
feature in which outlet executives are
invited to comment on industry issues.
200 ioJ calendar
ICSC european Conference,
16-18 April, Amsterdam, The
Netherlands, insight into the
latest industry trends and
major projects in Europe.
news Deadline, 21 April for
Summer 2008 IOJ, focusing on
Asia-Pacific outlet retailing
ICSC reCon, 18-21 May, Las
Vegas, U.S., world’s largest
retail real estate conference,
including Global Outlet Retail
Panel
news Deadline, 7 July, Fall
2008 IOJ New Projects Issue
news Deadline, 15 August, 2008
European Outlet Conference IOJ
issue, focusing on Europe
Fall Outlet Deal making,
8-9 September, New Jersey,
U.S., ICSC North American outlet
retail deal making event
european Outlet Conference,
13-14 October, London, ICSC
conference for the European
factory outlet sector
sTaFF
rene TremBLay
CHAIRMAn
micHaeL P. KercHevaL
PRESIDEnT AnD CEO
rudoLPH e. miLian, scsm, scmd
ICSC SEnIOR VP
Jay sTarr
ICSC SEnIOR VP
FLorida oFFice
29399 U.S. Hwy. 19 n., Suite 370
Clearwater, FL 33761
+1 727 781-7557
Linda HumPHers
Editor in Chief, ext. 472
lhumphers@icsc.org
Tom KirWan
Senior Editor, ext. 471
tkirwan@icsc.org
randy Gdovin
Art Director, ext. 451
rgdovin@icsc.org
saLLy sTePHenson
Senior Advertising Executive
+1 847 835-1617
Fax: +1 847 835-5196
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Karen KnoBeLocH
Advertising Prod. Mgr., ext. 441
kknobeloch@icsc.org
International Outlet Journal is a publication for the
non-U.S. factory outlet industry. Copyright © 2008