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.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)