LONDON — The luxury sector may be losing steam, but sales of last season’s Dior furs, diamond studs and Bottega Veneta biker boots are still generating double-digit growth.
Value Retail, which operates nine upscale outlet shopping centers across Europe, is expecting revenue to rise at least 15 percent this year above last year’s 1.5 billion euros, or $2.1 billion at average exchange, for 2011.
While that may not match last year’s 20 percent increase, growth at the Value Retail villages far outstrips market projections for luxury.
Earlier this month, the consultancy Bain & Co. said it expects the luxury-goods market to grow by 4 to 6 percent a year between 2013 and 2015, which is below the 10 percent forecast for 2012.
Although his retail villages are filled with high-end fashion and luxury brands, including Gucci, Dior Homme, Jimmy Choo and Smythson, the luxury slowdown doesn’t worry Scott Malkin, Value Retail’s chairman.
“We have a different consumer; Bain is not talking about our consumer,” said Malkin. Instead, he stressed he’s in the business of tourism — “Europe’s only growth industry,” he interjected — and of creating retail environments that encourage people to shop as if they’re on holiday.
According to the latest quarterly report from the European Travel Commission, the number of Chinese visitors to Western Europe is expected to increase 55.1 percent by 2016. By 2016, the number of Indian visitors to the region is set to increase nearly 40 percent.
That’s one reason why — in a world where nearly everything can be purchased off a computer screen, and where many of Value Retail’s direct competitors operate online — there is no e-commerce element to the business.
Once again, Malkin said it’s because Value Retail is fundamentally a tourist business. Most of Value Retail’s marketing is done in tourists’ home markets, through airlines, tour operators, credit-card companies and online travel agents.
Malkin said 26 percent of the 2012 revenue will come from sales to non-European Union customers, compared with 8 percent five years ago. At Bicester Village, Value Retail’s flagship property outside Oxford, England, 80 percent of sales come from tourists, while four out of five Chinese tourists to the U.K. make the trek to the Oxfordshire outlet.
In the nine months to September, total gross sales at Bicester have risen 17.4 percent year-on-year, compared with 14 percent across the portfolio. Bicester, which has the highest sales per square foot of any Value Retail property — $3,300 compared with the portfolio average of $1,700 to $1,800 — isn’t the only village with an international clientele.
China and Russia remain Value Retail’s two largest markets, accounting for 43 percent of all tax-refund sales. Brazil and Kuwait are also strong markets, according to the company. Total tax-free sales in the eight months to August were up nearly 50 percent to $260 million year-on-year.
Next year, Value Retail is set to take its designer village concept directly to one of its largest customer bases, with the opening of Suzhou Village, a 600,000-square-foot shopping mall not far from Shanghai, China.
Malkin said that Fidenza Village, outside Parma, sees a lot of Russians, while Kildare, near Dublin, attracts mostly U.S.- and U.K.-based customers and La Roca Village, outside Barcelona, draws the Chinese.
La Vallée Village, which is not far from Paris, is set to grow by nearly 42,000 square feet on Nov. 13 with the opening of its latest phase. Some 18 new boutiques, including Hugo Boss, Sonia Rykiel, Ermenegildo Zegna and Paul & Joe will be part of the new development.
La Vallée is currently trading at $2,000 a square foot — lower than Bicester but higher than the portfolio average — while total gross sales were up 23.5 percent in the nine months to September.
Next month at Maasmechelen Village in Belgium, Helena Christensen will unveil a limited-edition tote bag in aid of the charity (Red), with profits going toward the fight against AIDS. The bag will be for sale exclusively at the Belgian village on Nov. 6, and across the portfolio of Value Retail’s villages from Feb. 1.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)