Kildare Village believes it is well positioned to prosper, despite the downturn.

Not many 83-yearolds can lay claim to clocking up almost 250,000 air miles a year as a result of global consultancy work, but Marvin Traub is not the average octogenarian.

Traub, the former chairman and chief executive of Bloomingdales and a retail industry legend, was in Ireland last week in his role as adviser to Value Retail, the owners of the Kildare Village luxury brand outlets.

T he term Celtic tiger was a new discovery for him, as the last time he visited Irish shores was in the 1980s when Bloomingdales’ landmark New York store was running a promotional campaign on Irish goods.

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Credited with transforming Bloomingdales into America’s glitziest store during the height of his tenure in the 1980s, Traub - who counts Ralph Lauren and Karl Lagerfeld among his friends - was excited by the ‘‘very different’’ country he arrived in last Friday.

‘‘Everyone uses this Celtic tiger phrase here - which is wonderful - but it is one which I’ve never heard before. I know about the Asian tiger economies, and now I can see the Irish one - the change has been amazing over the last 20 years,” he said.

Traub is involved in a host of retail projects, from the design in Dubai of the biggest shopping mall in the world, to the rolling out of Tzum in Moscow (the equivalent of Brown Thomas in Ireland).But he has been working on Kildare Village, with Value Retail chairman Scott Malkin, for the last two years. The village is now home to almost 50 high-end brands, with prices of luxury goods reduced by up to 60 per cent.

According to Malkin, there have been almost 1.5 million visitors to the outlets this year, and the growth in sales year-on-year is 10 per cent. Value Retail pioneered high-end brand outlets in Europe (with the first in Oxfordshire, England, in 1995), and owns outlets in Spain, Germany, France, Belgium and Italy. The growth in sales in Kildare Village has already exceeded Value Retail’s expectations.

However, the Irish retail sector has experienced a downturn in sales in the last year, with middle-market stores and their goods among the largest casualties. Traub is confident that the fourth quarter will see a reversal of this trend.

‘‘The US and Europe are suffering from the credit crunch at the moment and some of my retail friends are struggling,” he told The Sunday Business Post.

‘‘This is a difficult period for all upscale retailers, but they have traditionally done better in these periods. I believe we are likely to see improvements coming as near as the fourth period. Stores are being more aggressive now, and the value that retail outlets, such as Kildare Village, offer means they will do well at a time like this.

‘‘The combination of a village presentation - that makes it an attractive and fun environment - allied with an opportunity to find value in distinctive brand names is a very appealing combination. Buying a Ralph Lauren sweater for half price - that is gratification,” Traub said.

Just as Traub believes there is a future of growth in luxury brands, Malkin believes Irish shoppers, particularly women, have become more discerning because of their travels to cities such as New York and Paris for high-end goods. He believes the target market of women who shop in outlets is ‘‘brand loyal, but not fashion forward’’.

‘‘Our target market is building a wardrobe they want to keep and wear for more than one season,” Malkin said.

‘‘That woman or person is not interested in cheap goods, but value. That woman, for example, is very good news for a brand because she pays full price for gifts when on holidays abroad - because she is indulging herself then - or she will pay full price when she has discovered a brand. The premise of Kildare Village is to support luxury and fashion brands, but using surplus stocks to offer good value for our customers. That defines our philosophy,” he said.

The businessman also believes that consumers can benefit because high-end brands are moving away from their once-restricted position in Dublin city centre to locations such as Dundrum Town Centre and Kildare Village. The brands require more products to stock these and, in turn, have surplus stock.

Malkin and Traub are in talks with other retailers to fill a further ten units at Kildare Village in another six to nine months. Because of the country’s size and uniform culture, there are no plans for another outlet centre in Ireland, said Malkin.

However, international visitors to Ireland are also a big target market for Value Retail.’ ‘As the Irish economy continues to prosper in the future, it will attract more residents and tourists,’’ Malkin said.

‘‘The tourists who visit Ireland are often in the high-spend category. M any who come on city breaks of three to five days or longer are interested in both the cultural attractions and shopping.

‘‘As a concept, Kildare Village makes a lot of sense for these visitors,” he said.

Traub highlighted the impact travel had had on the retail sector ‘‘the world over’’, and said a huge amount of business was now done with travellers in places like Dubai, where he is advising Harvey Nichols as it prepares to open its first store there.

‘‘In recent years, a lot of the growth of US brands has come from offshore. Ralph Lauren targeted the European market and, within a couple of years, his sales had grown from $200 million to more than $1 billion - and off-price retail was an important ingredient of that strategy,” Traub said.

‘‘More than half my clients are based outside the US now - in places such as Athens, Istanbul, Bucharest and India - where new retail entities are evolving. More disposable income means more demand for luxury goods, so the future of this sector is a healthy one.”

By Nicola Cooke

The Sunday Business Post Online, September 14, 2008

http://www.sbpost.ie