START DATE AND BRAND MIX COULD DECIDE WHICH CENTRE SUCCEEDS

Slovakia to get two new outlet centres

SLOVAKIA is a small country, but that has not stopped it from having two national beauty contests or two press agencies competing for their share of a fairly diminutive local market. It seems that this trend is continuing, with two fashion outlet centres due to open in the coming year, both of them near to Bratislava. Experts describe the plans as “courageous”, given that a well-established outlet centre already exists in the nearby Austrian village of Parndorf.

SLOVAKIA is a small country, but that has not stopped it from having two national beauty contests or two press agencies competing for their share of a fairly diminutive local market. It seems that this trend is continuing, with two fashion outlet centres due to open in the coming year, both of them near to Bratislava. Experts describe the plans as “courageous”, given that a well-established outlet centre already exists in the nearby Austrian village of Parndorf.

Earlier this year, plans to build two factory outlet centres – i.e. retail shopping facilities where people can buy discounted branded goods – were announced: One Fashion Outlet, to be developed by Realiz in Voderady, near Trnava; and D1 Outlet by IPEC Group, near Senec.

“Plans to build two outlet centres close to Bratislava are very courageous,” František Paračka from the department for retail space rental at Cushman & Wakefield Slovakia, told The Slovak Spectator. “There can be only one good outlet in the Bratislava area,” said Paračka, who is also listed as a leasing contact for D1 Outlet. He added that everything depends on which centre is completed first and on each centre’s mix of tenants.

Martin Biró, the head of the retail department at CB Richard Ellis in Slovakia, thinks that the first outlet centre on the market, providing it has enough interesting tenants, will succeed.

“We do not expect individual brands to rent retail space in both outlets because due to the short distance between them they would end up competing with each other,” Biró told The Slovak Spectator. “We therefore expect timing and initial success in renting retail space to be decisive factors in their success.”

Both Paračka and Biró point to Designer Outlet Parndorf, a nearby outlet centre which has been open for more than 10 years and where Bratislavans are regular shoppers.

“Slovak outlets need to attract mostly brands which are not present in the Parndorf outlet centre, which is very popular among Slovaks,” said Paračka.

Since Slovakia is the only country in the Visegrad Four region which does not have an outlet centre yet, and because many international brands do not have the opportunity to sell their old collections via outlets in Slovakia, Paračka sees the timing of the outlet concept as welcome.

Biró agrees that Slovaks are certainly interested in purchasing branded products at discounted prices, something that has been proved by the popularity of the Austrian Parndorf outlet in Slovakia.

According to Paračka, the biggest advantage of the outlet concept is that it offers reduced prices year-round.

“These reductions may reach 30 to 70 percent of the original item price,” said Paračka. “Regular shopping centres may offer price reductions only twice a year. An additional benefit of outlets in Slovakia will be Sunday opening, which may attract Austrian shoppers.”

Biró explains that direct producers of branded goods in particular tend to rent premises in outlet centres, which enables them to offer the goods for lower prices than in traditional shops.

The outlets also offer collections from previous seasons, excess goods or styles which are about to be replaced and are therefore discounted.

“We know of two concepts for factory outlet centres: one is open, in which shop entrances are external; and the second is the so-called outlet mall, similar to a normal shopping centre,” said Biró. “In the case of the outlet centres planned for Slovakia, both are open-concept. This concept offers lower construction and operating costs and thus lower rentals.”



One Fashion Outlet



The idea for One Fashion Outlet was born in 2008. It crystallised into a plan by the One Fashion Outlet company to build an outlet centre in Voderady, about 13km from Trnava and 48km from Bratislava. The developer of the €75-million investment is the Realiz company.

“Austria’s Parndorf [centre] has been here for over 10 years and has already explained to Slovak customers what outlet shopping means,” Vladimír Kozár, project manager of One Fashion Outlet, told The Slovak Spectator. “It is high time that we Slovaks also have our own outlet centre and that we do not need to travel constantly to Austria. But Bratislava is not the whole of Slovakia and other regions also deserve such services.”

The catchment area, i.e. the area and population from which the outlet will attract customers, will contain 1.32 million people within a 60-minute drive, including Bratislava, and 4.82 million people within 90 minutes’ drive, the project website states.

“With regards to the architectural side, we decided to address the English architecture studio Holder Mathias as they have long-term experience with such projects,” said Kozár.

The modern-looking project is designed in village style, to fit in with the neighbouring environment.

“Our concept, when compared to normal shopping centres, is open and creates harmony with nature by usage of wood, green areas and water,” said Kozár. “The project is designed for a large plot of land … with large parking, excellent connections to the existing road infrastructure and visibility directly from the highway.”

Referring to D1 Outlet, Kozár says he believes that in Slovakia there will be space for only one professional outlet centre.

One Fashion Outlet is projected to be built in three phases with construction due to start in early 2011. The first phase includes 16,000 square metres for almost 70 units. During the second phase, 11,000 square metres of retail premises will be built. After the third phase is complete, there would be over 36,000 square metres of retail premises, restaurants, cafés and other recreational facilities. A playground and a lake are also planned. The first phase is due to open by the end of 2011.

“We will focus on families and the middle class, who like to be well dressed for the best prices,” said Kozár, adding that a proper mix of brands will be the alpha and omega of the centre and it is concentrating on getting high-grade brands into the centre – but at outlet prices, as is the case in other countries. Since intensive negotiations are now going on, Kozár was tight-lipped about which trademarks shoppers will find on goods on sale at the centre.



D1 Outlet



D1 Outlet will be located 20 kilometres east of Bratislava near the Senec exit of the D1 highway, nearly 22 kilometres from One Fashion Outlet in Voderady. The catchment area is similar, with 4.3 million people living in four countries (Slovakia, the Czech Republic, Austria, and Hungary) within 90 minutes’ drive. The investor, IPEC Group, plans to invest €35 million in the project, which when completed should consist of 25,000 square metres of retail premises.

“All the consumer surveys show that Slovaks like to buy branded products,” Ľudovít Tóth, from public relations agency Event2all, told The Slovak Spectator, when presenting the project. “The only thing 'slowing' them down is prices. Moreover, a real factory outlet centre is missing in Slovakia. Since the investor IPEC Group owns land with an ideal position for this purpose… the decision was easy.”

D1 Outlet, he says, will be constructed in the village style, paying tribute to local architecture and featuring store facades inspired by the architecture of the Small-Carpathian region.

“Merchants prefer this style and also from our point of view this attitude is more friendly and personal than a big ‘box’ full of shops,” said Tóth.

With regards to competition from the outlet in Parndorf, Tóth sees Sunday shopping as a great advantage of D1 Outlet (Sunday opening is prohibited in Austria). It wants to focus on economically active citizens living in the region as well as tourists travelling on the D1 highway, for instance people travelling to the aquapark in Senec.

Like Kozár at One Fashion Outlet, Tóth declined to reveal any of the brands expected to rent space in D1 Outlet. The launch of the outlet centre will be managed by Susanne Solterer, who has experience gained launching five other outlet centres, including the one in Parndorf, at which she worked for five years as general manager.

In its first phase the outlet centre will offer 8,500 square metres and 50 shops; it is due to open in autumn 2011.

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