Facilitator

Jean-Paul Leroy Fashion Daily News

Speakers
Marina Martorana Journalist Corriere della Sera	Geoffrey Nidd General Manager Troyes et Roubaix McArthurGlen	Christine Baudchon Director of the Zapa chain

Marina MARTORANA
The "typical European consumer" does not exist. In Italy, cultural and sociological differences can even be seen from one region to another. In Milan, for example, brands are much less sought after than in the rest of Italy. Today consumers are looking for quality. But brands do no longer always guarantee quality! The success of factory outlets in Italy can be explained by the leisure factor (people come as a family at the weekend as a leisure activity) and by the low prices and brands that are on sale.

Jean-Paul LEROY
Would factory outlets enjoy greater success in France if they could open on a Sunday?

Geoffrey NIDD
Yes. Factory outlets can also be used as a tourism argument – come and visit Troyes, for example.

Jean-Paul LEROY
Are brand and price now no longer sufficient to enable a factory outlet to survive?

Geoffrey NIDD
The relation between the brand and price is fundamental. They are both of equal importance. The customer expects an average discount of 42%.

Jean-Paul LEROY
Is there a typical brand outlet customer profile?

Geoffrey NIDD
For Mc Arthur Glen, the typical customer is a 35-year-old woman who has spent around two hours to get to the centre. She stays for three hours and visits eleven shops and buys in four of them.

Jean-Paul LEROY
Do consumers take into account the fuel they have used to come to the centres?

Geoffrey NIDD
Today, customers are not just looking for a brand and a good price, but also atmosphere, ease-of-access, information, etc. The market is more sophisticated than five years ago.

Jean-Paul LEROY
Are high-street shop customers and factory outlet customers different?

Christine BAUDCHON
Zapa has five brand centres and a chain of thirty shops. In our brand centres, consumers used to be looking for a brand. Now they are also seeking a price and an identity. We have developed the same customer service and the same merchandising in our high-street shops as in our Zapa brand centres. This marks us out from our competitors. We have thus increased our prices by 17 % in a year without losing any customers, because of the added value we have in terms of customer service.

Jean-Paul LEROY
Do customers differentiate between the high-street shops and the brand centres?

Christine BAUDCHON
Yes. The same customers frequent the factory outlets and the high-street shops. The closeness of the brand centres is not detrimental to the brand sold in our high-street shops.

Jean-Paul LEROY
Is a factory outlet more profitable than a high-street shop?

Christine BAUDCHON
Profitability depends on the location of the high-street shops… We are satisfied by our brand centre outlet sales.

Jean-Paul LEROY
What brands can be sold in a factory outlet?

Geoffrey NIDD
We select the brands depending on how well they are known in the market and the results of our studies of their popularity. How the brand presents the product is also very important. We conclude ten-year leases with the brands.

Marina MARTORANA
In Italy, two cultures co-exist – those people who are seeking quality and those who are looking for a brand. Certain brand centres use events to draw in customers (such as the jazz festival in a Mc Arthur Glen centre in Italy).

Jean-Paul LEROY
What do you think about brand centres which sign very short-term leases with the brands?

Geoffrey NIDD
In France, leases are generally for ten years. The short-term leases in La Vallée Shopping Village are an exception. In England, 10 % of the brands change each year. In 1995, only ten-year leases existed. When you start with this type of lease, it is impossible to change.

Jean-Paul LEROY
How do you check the brand prices in these centres?

Geoffrey NIDD
We conduct two price controls per year. If the brand does not observe the discount, this can result in cancellation of the lease.

Jean-Paul LEROY
At the outset, factory outlets were not entitled to use the brands for advertising purposes. Has this changed?

Geoffrey NIDD
Yes.

Jean-Paul LEROY
What can be done to ensure that the centres operate better?

Geoffrey NIDD
Developing leisure activities depends on the trading area. At Troyes, it is difficult to develop leisure activities in the evening as customers come from far a field. In Wales, cinemas located next to the centres are very successful.

Christine BAUDCHON
I do not think that Sunday opening should become generalised. Plan de Campagne, which opens on a Sunday, has enormous sales on that day, but this is offset by more modest results at the start of the week.

Jean-Paul LEROY
What are the brands and sectors that do well?

Geoffrey NIDD
International and luxury brands.

Discussions with the floor

Jean-Pierre LEHMANN (President of the National Town-centre Federation)
What is the reference price?

Geoffrey NIDD
The reference price is the previous year’s street price.

Jean-Paul LEROY
How regularly do customers frequent your centres?

Christine BAUDCHON
On average, a customer comes twice a season. High street shop frequentation is greater, come customer come twice a month. Fifteen percent of customers visit both the factory outlets and the high-street shops.

Jean-Pierre LEHMANN (President of the National Town-centre Federation)
Is not the increase in factory outlets likely to cause stock depletion? Is more manufactured in order to supply these sales outlets?

Christine BAUDCHON
When we order, we consider the factory outlets as shops in their own right.

Jean-Paul LEROY
You consider factory outlets as a new distribution channel…

Christine BAUDCHON
We do not buy for the factory outlets, but we take them into account in our stock management.

Geoffrey NIDD
I don’t agree. Major brand production is limited. A major brand can choose to market its unsold stock elsewhere than at Troyes!

Jacques MARY (shopping mall manager at Cholet)
Sixty percent of one Cholet brand’s production is for factory outlets and 40% for conventional outlets.

Brigitte MAULEON (decoration shop owner)
I have noticed that factory outlets dell the same products as I do at the same price, but they indicate a 30% discount. I am shocked to hear that the Zapa factory outlets offer the same services as in a small shop. Moreover, someone who lives two hours away from a centre will not come back of there is a problem with what they have bought.

From the floor
Certain high-street shops do not observe competition rules. Does Zapa work with other brands in its brand centres?

Christine BAUDCHON
We like to work with our competitors, which attracts customers.