Lifestyle & Culture

Billions: Luxury fashion outlet developers investing crazy money in new centers across Europe

At the same time conventional malls are dying, fashion outlet developers are throwing billions of euros at centers, with dozens of new developments opening or on the drawing boards across Europe. Increasingly, the luxury fashion outlet centers are drawing tours for shop-cations, shifting tourists looking for deals on Tod’s, Brioni, Louis Vuitton and Chanel from culture to retail.

Which is why developers are competing for this traffic by putting discounted apparel in expensive buildings.

Instead of drab American-style outlets, Europe-based developers are spending millions to make open-air outlet complexes look like Italian villages with elaborate landscaping, or futuristic city centers. For example, Gruppo Stilo
 Torino Fashion Village commissioned A-list architect Claudio Silvestrin to build Torino Outlet Village.

This “spare no expense” strategy is working.

We know from our analytics that expats really like luxury shopping, especially discount luxury shopping.

Since Dispatches Europe launched three years ago, our posts about Europe’s best fashion outlets have collectively racked up about 400,000 page views, and still get hundreds of views every day.

What’s changed since we started Dispatches in 2016 is that the majority of outlets were in the center of Europe, or in Italy, where so much of the fashion is made.

Now, developers are focusing on what their data say are under-served markets in Portugal, Spain and Eastern Europe. London-based McArthurGlen has the largest presence in Europe (466,000 square meters of leasable space across 24 outlets in nine countries). Neinver (311,000 square meters across 15 outlets) and Bicester, UK-based Value Retail (173,000 square meters in nine centers) are No. 2 and No. 3 respectively.

There are other emerging developers such as 5-year-old VIA Outlets, which is partners with Value Retail and Hammerson, the British mall developer.

VIA Outlets:

Last November, VIA Outlets executives announced they were investing more than 29 million euros to expand or remodel multiples outlets including centers in Portugal, Germany, Sweden, Poland and Spain.

• Hede Fashion Outlet in Gothenburg Sweden is adding an additional 3,000 meters square to the centre, increasing the number of stores by 15, bringing the total number to 75.

• Sevilla Outlet in Spain is getting a 13 million euro expansion.

VIA is financing all this with 1 billion euros in top-line sales in 2018. VIA has 11 outlets in nine countries with more than 1,100 stores including 139 new stores that opened in 2018.

McArthurGlen

About the same time VIA announced it was expanding and remodeling stores, McArthurGlen announced it was investing 1 billion euros from now through at least 2021 to build four new developments and expand seven existing centers. (A lot of the capital comes from Simon Property Group, a huge, publicly traded retail developer based in Indianapolis, which bought 50-percent of McArthurGlen in 2013.)

• Last November, McArthurGlen obtained final approval for the first luxury designer outlet in the western Paris area. Designer Outlet Normandie won’t open until 2021, but boy, is it in a perfect location … about an hour’s drive west of Paris near Giverny.

The 150 million euro project will only have 20,000 square meters of retail space with 100 stores and seven restaurants. That’s fairly small compared to Discount Center Roermond in the Netherlands – also owned by McArthurGlen –  which has 50,000 meters square of space and maybe 150 stores. But it’s not just outside Paris.

• A lot closer to completion is Designer Outlet Málaga in Spain, projected to cost 140 million euros. The new open air village style development was scheduled to open this spring, the first luxury outlet in the south of Spain. Alas, zoning issues over new access roads has pushed back the opening until late in 2019.

Icon Outlet in London

This is one of the rare luxury outlet centers in a city center since most brands don’t want to cannibalize their full-price retail stores in conventional malls and high streets.

ICON, which has 22,000 meters square in the O2 complex (formerly the Millennium Dome), opened late last year but is still not complete, though it has two Brooks Brothers stores.

The cool thing about this outlet center is it has more British brands and fewer Italian, German or U.S. brands. They include Aspinal of London, high-end shoes from Joseph Cheaney & Son, Cath Kidson, James Lakeland, Phase 8, Jack Wills, Hackett, Hobbs and Osprey outdoor stuff.

Alas, look for the outlet boom to fade a bit in Europe because McArthurGlen, Simon and the rest have discovered that increasingly affluent Asian countries are the next discount frontier.

CHECK OUT MORE DISPATCHES POSTS ON FASHION OUTLETS:

• Europe’s outlet centers (updated): Ultra-luxury at (almost) affordable prices, along with mid-priced brands
• Europe’s fashion outlet centers, Pt. 2 (updated): Ultra-luxury at (almost) affordable prices in Spain and Italy
• Designer Outlet Roermond (updated): Discount shopping in Holland, with a lovely town thrown in for free
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