With the Ted Baker outlet store at the UK’s Bicester village reporting a 50% increase in turnover and Poland-based Fashion House Outlet Centres announcing its intention to build a second outlet center in Bucharest, Romania as well as in Moscow and St Petersburg in Russia, and in Kiev, Ukraine - all of which it hopes to have out of the ground within two years - outlet centers are booming for developers and retailers across Europe.

These announcements were made at the third annual International Council of Shopping Centers (ICSC) Outlet Conference in London, organized by The International Outlet Journal (IOJ) and ICSC.

New research presented at the conference by retail analysts Ecostra, showed that, according to outlet tenants questioned for the report, Bicester Village, operated by Value Retail, is the top performing outlet center in Europe and that Germany was the most promising upcoming market for retail tenants. The full report will be published by CB Richard Ellis in November.

It has always been the opinion of those in this niche sector that outlet center retailing does well in an economic downturn; now there is some evidence to prove it. Twenty four outlet centers are slated to open over the next year in 13 countries, including in Croatia, Bulgaria and Romania, as well as in the older markets of France and the UK. In Italy, another well-established market, six outlet centers will open over the next 12 months, and developers from the Baltic States, Turkey, Ukraine and Russia are also seeking to bring this retail model to their countries.

Banks are still lending to the sector, but demanding more scrutiny of plans before investing. Fund manager Henderson Global Investors has built up a €2 billion investment in outlets, after launching its European Outlet Fund in 2004. Speaking at the conference, David Williams, fund manager at Hendersons said that its outlet center investment has exceeded investor expectations.

He added: “This retail model is understood and accepted by the big banks and we see excellent growth prospects supported by strong demand.”

However, whilst confidence remains in outlets, delegates viewed the wider state of retail with concern, acknowledging that it could be up to 18 months before an upturn.

According to conference chair and editor of International Outlet Journal, Linda Humphers: “Outlets will continue to weather this formidable economy and I expect to see more upscale brands take a leap of faith and jump into outlet retailing.”

Source: Nicky Godding Communications http://www.europe-re.com, 10 November 2008