Heathrow, Charles de Gaulle and Frankfurt are important venues for luxury shopping.
The retail areas of Europe's airports are poised to become the latest luxury shopping hot spots and are undergoing major transformations.
"Fashion's time has come now," said Brian Collie, non-executive director at McArthurGlen, the British specialty retail developer.
McArthurGlen has adopted a middleman role for luxury brands crossing over into the travel retail sector. It assists the entry of brands into airports and advises airports about how to maximize their retail areas and bring the image of those spaces up to speed for new tenants.
Collie said the sector represents a major opening for retail development. "There's a huge opportunity in any major city to bring what they've got in the city to the airport — and to do it with style," he said.
Here WWD looks at the retail developments at three of Europe's major airports: Heathrow Terminal 5, Paris' Charles de Gaulle Terminal 2E and Germany's Frankfurt:
HEATHROW TERMINAL 5
Representing an $8.84 billion investment, Heathrow Terminal 5 has been plagued by flight cancellations, delays and baggage mix-ups since launching in March. The problems caused British Airways to postpone moving the majority of its long-haul flights to the terminal.
Retailing appears to have escaped damaging fallout. Paul Smith, who opened a Globe unit, said delays have been beneficial because passengers spend more time in the terminal.
The terminal is exclusively for British Airways passengers on domestic, European and trans-Atlantic flights, with retail space controlled by the retail unit of BAA, which owns and runs seven airports in the U.K.
Harrods launched a 11,000-square-foot department store, while Prada opened its first European airport store. Other brands in the terminal include Tiffany & Co., Links of London, Coach, Mulberry and Reiss. There's also an Elemis, a spa and restaurants by Gordon Ramsay. Despite higher operating costs, brands also said stores were profitable.
Hazel Curry, head of category, fashion and fashion accessories for BAA, discussed the terminal with WWD.
WWD: What was your vision for the new Terminal 5?Hazel Curry: One of the key drivers was to ensure that the retail offering was not only strong, but sat in design-led surroundings. As an airport terminal, however, retail is just part of the passenger experience and throughout the process, we have ensured that the stores are on the way, not in the way. We wanted to create a shopping environment that was functional as well as pleasurable.
WWD: Who designed the retail space?
H.C.: The Design Solution [London-based architectural firm, specializing in retail] acted as design guardian and worked with us and each of the individual retailers to ensure that we created a harmonious look throughout the terminal.
WWD: Was it part of the airport's strategy to give a new look to the retail area? If so, why?
H.C.: Yes, absolutely. We wanted the retail space to be unique and guided our retailers at Terminal 5 by creating our retail promises: to surprise, respect, tempt, simplify and satisfy. We challenged retailers to come up with something totally unique for Terminal 5.
WWD: What is the range of rents? How much has this increased over the past years?
H.C.: We don't strictly charge a rent. We work on a concession agreement basis, whereby each retailer pays a percentage of their sales to BAA. We operate on a similar basis as a department store would manage its concessions.
WWD: Please comment on any strategies for retail development.
H.C.: Over the past few years, there has certainly been an increase in interest from passengers around buying fashion items at the airport. Shopping has become more of a hobby. For business travelers especially, time at the airport is no longer dead time but time they have had back to browse.
WWD: Which fashion and beauty brands are present?
H.C.: New to Terminal 5 are Tiffany & Co., Coach and Prada. Through the Harrods store, [pieces by] Alexander McQueen and Fendi accessories are available, as well as Paul & Joe and Missoni. At Paul Smith's Globe concept, you can buy furniture and his signed photography, as well as his men's and women's fashion. Also, the Mulberry store has a Mulberry tree within the store.WWD: How do you see the retail landscape evolving for airports? What are airport shoppers after?
H.C.: We know that passengers, especially U.K.-based, are looking for more of a high street offering from the airport. However, they have been very clear that they do not want to see discount or supermarket brands offering fashion. Passengers, especially those from overseas, also expect to see the high-end luxury brands at the airport and this is something that I do not think will ever change.
WWD: Do you have any feedback on who is spending on beauty and fashion in your airport retail areas in terms of demographics?
H.C.: In terms of the profile of the fashion category, it tends to mostly be the younger women. However, there is an increasing amount of young men who now have an increased interest in fashion and are shopping at the airport.
CHARLES DE GAULLE TERMINAL 2E
An aggressively ramped-up luxury fashion and beauty offering is headed to Charles de Gaulle's overhauled terminal 2E, which opened in March.
Yves Saint Laurent will open its first airport boutique in the terminal over the coming months.
Also coming are Van Cleef & Arpels, Chaumet, Cartier and Printemps with corners for Marc by Marc Jacobs and Paul & Joe.
Mathieu Daubert, manager of retail goods for Aéroports de Paris, discussed Terminal 2E with WWD:
WWD: What were your design objectives?
Mathieu Daubert: We had two: to make the space adapted to the comfort of travelers and to [live up to] the best international standards of luxury brands.
WWD: How much freedom do brands have with the design of their stand-alone stores?
M.D.: Seeing as they are all established brands that are used to controlling their retail environments, we give them a lot of liberty, though brands do have to submit proposals first. For multibrand environments we do monitor more closely. It has to work on a global level with other brands.WWD: Will you have any global brand airport exclusives?
M.D.: Yes, we already have exclusives with YSL and Chaumet, for example....The idea is to differentiate our offer from other airports.
WWD: How do you see the offer developing?
M.D.: We have a vocation to strongly develop beauty and fashion, hopefully bringing them up to equal levels. It's important to diversify our revenue.
WWD: Which fashion categories sell better in airports?
M.D.: We definitely [put more focus] on accessories for practical reasons. Passengers buy a lot more accessories than confection. For clothing, women tend to buy more tops and basics. Shoes is one category that has big potential even though people have to spend time trying them on. We plan to introduce shoes by Prada, YSL, Hermès and Repetto by September.
WWD: Do you track who is spending in the terminal?
M.D.: We have access to customers' boarding cards so we can only track their destination, not nationality. Based on that, our best markets are Japan and [South] Korea, followed by Russia, China and Ukraine, then Africa and the Gulf region, in particular Lebanon. Men represent 55 percent of sales.
Traditionally, Frankfurt Airport's Terminal 1, the international passenger transfer zone, has served as the core marketplace, housing mid-to-luxury fashion and beauty players ranging from Timberland to Prada.
But as one of the 10 biggest airports in the world, new retail developments are constantly under way, said Ute Pohl, vice president of retail for Fraport AG, which operates the airport.
"In just a few months the Airbus A 380 will begin operating on these routes....To offer attractive shopping opportunities to above-average spenders with time on their hands, we are developing a central gallery featuring shops, restaurants, cafes and a wellness spa," Pohl said. "The layout and design of the future Terminal 3 at Frankfurt Airport will focus on retail right from the start."WWD: Please comment on any other new retail developments in the airport.
Ute Pohl: In Terminal 1 we're redeveloping a completely new area, the Airport City Mall and Concourse A-West. When it's finished [in 2012], the Airport City Mall will measure 500 meters [1,640 feet] long, extending beneath the A, B and C departure and arrival areas of Terminal 1. It will be an entry point to Frankfurt Airport and a place where diverse passenger flows converge and are distributed....The retail mix will consist of young and trendy fashion brands, [as well as everyday items and dining areas].
WWD: Who is designing the area?
U.P.: Jo Franzke. Its core concept consists of light gates that create a daylight atmosphere. The shop fronts feature copper-colored metal frames....The new A-West concourse was designed by Gerkan, Marg & Partner, the architects behind Berlin's main station.
WWD: Please comment on any strategies for retail development.
U.P.: First of all, marketplaces, malls and shops have to be strategically placed along the paths to the gates. We develop all our marketplaces along the most highly frequented passenger routes....A broader range of shops is evolving, [especially linked to the wellness trend].
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