MILAN — It may be hell and brimstone on the main streets of many European cities, but shoppers keep heading to designer outlets, like those owned and operated by McArthurGlen, one of the leading operators of outlet villages in Europe.
At a press conference last week here, group executives said the company is pushing ahead with plans to open new locations and expand existing ones, even as clouds continue to thicken over its main markets. During the conference, held at the recently opened Armani Hotel in the city’s center, executives said the group will open an outlet next fall in Neumuenster (near Hamburg), and announced expansion stages for six existing outlets. The company will invest 120 million euros, or $160.3 million at current exchange rates, in the new German outlet, its second in the country and the group’s 21st outlet village, which, in its first phase, will host 100 stores.
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On the sidelines of the event, Claude Hargreave, the group’s regional development director, told WWD that the company is also considering opening two more locations, both in France: one near Marseilles, in the south, and one “west of Paris.” McArthurGlen already operates two locations in the country, one south of Paris and another near Lille, in the north. The company is also thinking about exporting its outlet village model outside Europe, toward other western markets. However, Hargreave said it was too early to speculate about possible locations and the timing of an eventual move westward into North America “is difficult to say.”
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In order to help sustain growth rates and combat weaker consumer spending in leading markets like Italy, McArthurGlen is planning to focus more energy on bringing international travelers to its European shopping villages. Through partnerships with package tour operators and airlines, among others, the group is targeting tourists from high-growth economies like Brazil, India, Russia and China.
At the Milan event, the privately held firm’s executives didn’t discuss overall group performance. However, in a statement, Gary Bond, chief of European development, said the company continues to “register strong growth, year after year” in Europe.
“We’re noticing that brands see designer outlets increasingly as a distribution channel which complements traditional channels, especially full-price stores and e-shopping,” Bond said in the statement. McArthurGlen works with 860 brands in Europe, including all the top 50 international luxury brands.
Group executives did offer some detail on the Italian market, second only to the U.K. in the number of outlet villages it operates. Revenues in Italy this year will be “over” 726 million euros, or $970 million, up 12 percent — including new shops — from 2010. On a like-for-like basis, revenues are seen up around 2.9 percent, in line with the previous year’s performance, the executives said.
Even countries particularly hard-hit by the euro-area crisis, like Greece, are performing well. Hargreave told WWD that the new designer outlet village near Athens, opened last summer and the first in that Mediterranean country, is performing “above our expectations.”