MILAN — Retail developer McArthur Glen and Italy's luxury goods association Altagamma will today unveil a joint venture to penetrate developing markets and explore travel retail in an upscale new format. McArthur Glen also plans to venture into full-price malls, a new strategy for the developer, which operates 15 designer outlet malls in Europe.
"With Altagamma, we want to create special opportunities in developing countries, a safe environment conducive to business," Joey Kaempfer, chairman of McArthur Glen, told WWD in an exclusive interview. "The partnership capitalizes on the combined strengths of Italy's leading fashion brands and McArthur Glen's experience in development and distribution. It eliminates individual risk and lengthy, unilateral lease negotiations."
Kaempfer pointed to India and Eastern European countries as markets with potential for the partnership. The executive said the first investment in a full-price mall in India would be in the range of 60 million to 90 million euros, or $80.6 million to $1 billion at current exchange rate, although no project has been confirmed. Warsaw is one potential city for the venture, according to the executive.
"Working as a team with an operating partner will allow the Altagamma brands, although recognizable and appealing in those countries, to enter markets that lack infrastructures," said Leonardo Ferragamo, the group's chairman. "It allows our members to experiment with new retail strategies, crucial to their growth, and it is an opportunity to explore new territories with the benefit of critical mass and rapid entry-to-market potential."
Kaempfer said the two partners were also finalizing an agreement with an international airport where the first tax-free luxury mall is set to open in February (the location has yet to be disclosed). "The retail space, between 22,000 and 43,000 square feet, will carry the Altagamma brands, at full price, but tax-free," said Kaempfer. The mall will be called Collezioni and be designed by the McArthur Glen organization.
The Altagamma association includes fashion and luxury brands Alberta Ferretti, Bottega Veneta, Bulgari, Emilio Pucci, Ermenegildo Zegna, Etro, Fendi, Salvatore Ferragamo, Gianfranco Ferré, Tod's, Valentino and Versace, in addition to nonfashion companies such as Alessi and Driade.
"Travel retail is a mature market, but it's in an expansion mode," said Ferragamo. "To enter this market, it's important to identify quality projects, efficiently managed."
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