An outlet for pent-up demand

Small talk
Outlet centres were once derided as the poorer relation of prime shopping centres. But that perception has been shattered by how well they performed during the pandemic. As, Thomas Reichenauer, the managing director and co-founder of ROS Retail Outlet Shopping, explains, this shouldn’t have come as any surprise to anyone.

How surprised are you that outlet centres have turned out to be more resilient to the pandemic than normal shopping centres?

Thomas Reichenauer, the managing director and co-founder of ROS Retail Outlet Shopping: We actually saw that outlet centres were a more stable business than normal shopping centres much earlier, during the financial crisis of 2008. Shoppers return to such centres more quickly and spend more money. The concept of the outlet centre – of a wide range of popular and well-known branded goods offered at prices that are always discounted – perfectly suits the current situation as well as changing consumer behaviour. Shoppers are still looking for premium brands, but not necessarily those from the latest collections, and they are also interested in low prices. Such preferences fit in perfectly with the outlet centre concept. Over the last few months we’ve been having to open and then close our centres, which are located from Portugal to Hungary. Now, and Poland is no exception to this, we’re seeing a return to normal business everywhere and even higher footfall than we did over the same period last year. What has resulted from theses very long lockdowns when people couldn’t go shopping is that they have quickly returned to our centres. Compared to last year we’re seeing a huge growth in shopping activity.

Designer Outlet Warsaw attracts shoppers with premium brands. What is the situation for these after a year and a half of Covid?

In the few years before the outbreak of the pandemic, it was clear that luxury brands were interested in outlet centres and were opening stores in them. The last year has been very difficult for this segment and especially for Italian brands. There’s been a lot of uncertainty across the world. Many of these brands have been acting very cautiously and have held off taking decisions. We’ve often heard them speak to us along the lines of: “We’ve got to assess our situation, we’re not looking to expand, we don’t need new stores.” But now we’re seeing everything returning to normal and the brands themselves are coming up to us asking to work with us. Luxury and premium brands are very careful about how they select locations for their boutiques – particularly when it comes to outlet centres. Top brands want to locate their stores near others that are similar, so they cannot be the only luxury brand boutique in a centre. They also expect shoppers that have come searching for the quality that premium brands offer to go from one store to another – whether it’s Polo Ralph Lauren, Tommy Hilfiger, Furla or Michael Kors.

ROS operates a huge number of outlet centres across Europe, but can you still feel the difference between more mature markets like Germany and – for example – Poland, Croatia and Hungary?

I’ve been working in outlet centres for over twenty years and we founded our own company more than ten years ago. At that time the difference between the different countries could clearly be seen, but now we simply operate the same way throughout the EU. However, what we have seen is that in the more mature markets our customers are no longer looking for even more stores and more brands, but in the CEE region there’s still a huge appetite for new stores. This can be seen in Poland, for instance, where a number of companies have actually debuted in our centres and they can still see opportunities for growth. There is one factor that still creates differences between the European markets – many French brands only operate solely in France and many of the super luxury Italian brands, such as Gucci and Prada, want to concentrate their activities in Italy. Their strategy, clearly, is to be very selective about the countries they expand to outside their home markets.

Which new brands have appeared on the scene since you extended Designer Outlet Warsaw?

A Polo Ralph Lauren store of more than 1,000 sqm has opened in the new wing, and we also have a new store that offers such brands as Swarovski, Lacoste, Regatta and Lindt. Our centre has a wide variety of goods – not only do we have fashion, we also have confectionery shops, interior decorating, jewellery and watches. And importantly a new café has opened.

Will food and entertainment play a greater role in the future in the tenant mix of outlet centres?

In the past, we only had one type of food court in our outlet centres. Now our idea is to have smaller points with snacks, ice cream or health foods. We’re also thinking about cafés and bistros that serve regional cuisine or vegetarian food. In this we’re following the latest culinary trends – those interesting niches that haven’t been tried before. By the way, the extension of our centre in Piaseczno has included rebuilding the food court. It now has new tables and comfortable couches with high backs that are both comfortable and give you a sense of privacy.

To end on a more personal note, you’ve been coming to Poland for many years. What do you like most about this country?

Poland is a beautiful and very diverse country. It has different landscapes, which I’ve had many opportunities to admire as I’ve driven through it. I’ve been to Kraków and Gdańsk, which is a very friendly town. This year, in Poland I had the chance to see something spectacular – the sea froze along the coast. I’ve never seen anything like this before. There was ice as far as the eye could see. Lakes freeze over in Austria, but seeing waves frozen solid into ice was astonishing to me.

Interview: Magdalena Rachwald