HONG KONG — Luxury outlet operator Florentia Village is to invest 1 billion renminbi ($159 million) to build an outlet in Chongqing, its seventh location within China.
Expected to be completed by the end of next year, the new outlet will be located in the Shapingba area of Chengdu, located in southwestern China, with its first phase covering approximately 322,917 square feet. It follows luxury outlet complexes by the group in Shanghai, Beijing-Tianjin, Guangzhou-Foshan, Wuhan, Chengdu and Hong Kong.
“With Florentia Village Chongqing, we [will] have accomplished our strategic business development in major cities in China,” said Maurizio Lupi, managing director of Florentia Village and RDM Asia. Lupi said the business, which offers discounts on high-end brands of up to 80 percent, will continue to expand in lower-tier cities with plans to be disclosed in the second half this year. Outlet shopping as a whole has been buoyed by positive macro trends such as household income, luxury brand awareness and car ownership increases in China.
Lupi added that the firm is seeking locales with an average of a 60-minute drive from the city center but easily accessible via highways, public transport and airports.
“We are very proud of our performance in China, especially in the top-tier cities. The markets responded positively, giving us confidence to further expand,” he said.
The group as a whole registered a total revenue of 6.7 billion renminbi ($1.06 billion) last year, growing 22 percent year-over-year and welcoming 13.6 million shoppers. To date, Florentia Village operates a total leasing area of 300,000 with 1,200 shops.
In 2017, Florentia Village Shanghai saw a 29 percent year-over-year sales increase while its Guangzhou-Foshan outlet grew by 40 percent, although its Beijing-Tianjin location was the most productive, with the company claiming the highest efficiency in the industry.