Sales at discount designer outlet villages are booming as Britain’s middle classes look for bargains and Russian and Arab tourists swap Bond Street for mall outlets in the country.

While sales elsewhere in the UK stagnate, gross sales at Bicester Village, the designer outlet centre near Oxford, are up 40 per cent on the same time last year, with like-for-like sales, which strip out new stores, up by 25 per cent. At McArthurGlen, the biggest outlet chain in the country, with seven sites, sales rose by 5.6 per cent in the second quarter, compared with the same time a year ago. At Junction One in Northern Ireland, sales rose by 8 per cent.

While McArthurGlen and Junction One sites include plenty of high street names, Bicester Village focuses on retailers at the more expensive end of the high street, such as Matthew Williamson, the fashion house, and Jimmy Choo, the shoe designer.

Reasons touted for outlet centres’ current success include sterling’s weakness, UK shoppers seeking better value and quality in hard times, and improved offerings as more fashion houses offload excess stock through them. Henrik Madsen, McArthurGlen’s managing director for UK & Northern Europe, said: “Brands that five years ago, or even last year, would never have dreamt of selling in outlet centres are now knocking on our door looking for opportunities.”

With continued economic uncertainty, many designers have found that they have overestimated demand for their goods at full price.

“The pickings are improving as fashion houses sell fewer clothes in their main boutiques,” said Scott Malkin, chairman of Value Retail, which owns Bicester Village.

The move from bargain-basement rummaging has also increased outlet villages’ appeal to the middle and upper-middle classes.

Britons’ trend towards holidaying in the UK has also aided discount villages, as people who would not usually make the trip visit as part of a day out.

The weak pound has helped to increase the number of Middle Eastern visitors to Bicester Village by 73 per cent in the past year, with Chinese tourists up 25 per cent and Russians up 87 per cent. Mr Malkin said: “They are staying in London and hiring a driver to go to Bicester Village for the day.”

This foreign trade has boosted the popularity of brands such as Dunhill, which is more of a status symbol in China than in the UK, and Burberry, a perennial favourite in Asia.

By Catherine Boyle

Source: http://business.timesonline.co.uk, July 27, 2009