Loving Outlet Shopping - Value Retail News

COVER STORY
FOCs countercyclical?
Proof’s in the numbers
By LiNDA hUMPhERS
Editor in Chief
T
he European outlet sector is
hungry for numbers. Not a week
goes by that IOJ doesn’t get a request
from readers for data on turnover, footfall,
occupancy, rents and siting strategies. And
lately, the big question has been whether
outlets really are countercyclical to a down
economy, or as Jayson Eagon of Henderson
Global Investors prefers to put it, whether
outlets are the defensive asset class.
Comparison with high street and other
shopping center sectors would seem to say
“yes” to both, and anecdotally, FOCs are
on the sweetheart train. But when an outlet
center such as Hornsea Freeport does fall
on hard times, the media are quick to put
all FOCs under the spotlight. So, there’s
nothing like actual numbers to convince the
skeptical and educate the uninformed.
The most helpful data would come
directly from the brands themselves, those
brands that operate outlet retail chains.
But in Europe, as in the U.S., brands are
4 InternatIOnal Outlet JOurnal Fall 2009
reluctant – and even prohibited – from
sharing this information. We understand
the reasons. Brands are using the outlet
distribution channel for a variety of purposes
and often the numbers aren’t broken
out by sector. In some cases, the outlet
channel is a good place to hide mistakes;
in other cases, the outlet channel is so
profitable that it makes wholesale divisions
shake in their boots.
In an effort to supply more of this
much-needed data to the industry, three
German researchers have issued an extraordinarily
in-depth performance report culled
from the retail community’s experience with
58 outlet centers in 16 European countries.
It’s no surprise that although the authors
contacted 150 brands about participating
in the survey, just 19 responded. Still, the
data appears credible and the authors have
generously allowed IOJ to sift through 150
pages of charts and analyses to share details
with our readers. The first story based on
this information appears on page 9.
European outlet developers are also
cautious about sharing numbers. Why give
away secrets to success that have been
earned through years of hard work, experience
and capital expenditure?
But IOJ put out a call for total, comparable
outlet-center sales and footfall
progress and we are pleased to report
that we have received data on 28 centers
from nine operators: Chester Properties,
Dubai Outlet Mall, GVA Grimley Outlet
Services, Henderson Global Investors,
ING Real Estate, Land Securities, Resolution
Property, Stable International and
Value Retail.
henderson Global Investors/
mcarthurGlen Group
Reporting on seven centers, all acquired
from McArthurGlen Group, which
still operates them: In Austria, Parndorf
Designer Outlet; in France, Roubaix Designer
Outlet and Troyes Designer Outlet;
in Italy, Barberino Designer Outlet, Castel
Romano Designer Outlet and Serravalle
Designer Outlet; in The Netherlands,
(Continued on page 6)
Serravalle Designer Outlet Village near Milan has helped push the Henderson Global Investors/McArthurGlen seven-center
portfolio to a 10 percent increase in YTD sales.