FACTORY outlet retail centres are becoming a feature of the retail scene, offering shoppers a continuous sale of branded products in an entertaining setting.
Famous names take space in such centres to move unsold stock from their own chains at heavily discounted prices. It might be thought that this would devalue the brand in consumers' eyes but this is apparently not the case.
Proponents of factory outlets, such as the major developer in the sector, Freeport Leisure, argue that they are beneficial to brands.
The consumer expects sales at the usual times of year, just after Christmas and in July. If these are not enough to get rid of stock
further sales and mark-downs will be necessary.
It is better that these items are taken right away from the shops and sold elsewhere.
Freeport insists that the goods in its tenanted shops are discounted by at least 30% and 50% is nearer the norm. Factory outlets appear to have struck a chord with consumers and retailers.
Millions of people visit Freeport's three developments. The site in Fleetwood has proved the biggest attraction to the area after the Blackpool Tower, with 3.6
million people visiting last year.
In Scotland, the present site at Westwood in West Lothian, which is located four miles from Junction 4 of the M8, is on a smaller scale but Freeport has great plans for it. With 110,000 square feet under retail, the company has more than 100 acres of land for development.
Apart from increasing the size of the centre, an indoor snow centre and a golf course is planned, along with an equestrian centre, cinema and pub.
Outline planning permission has been granted but the decision rests with Scottish Secretary Donald Dewar. Like-for-like sales by tenants rose 9% in 1997-98.
The idea is to make the centres attractive places to visit in their own right. So special lighting and water effects are installed along with adventure centres for children. ''Hubby creches'' with big-screen sports television and bars are available for partners who cannot face the shops. Special floor lighting is used to ''steer'' shoppers so that they at least go past as many shops as possible.
Freeport is also keen to develop non-car access where possible. It is proposing to run a free train link from London to its centre at Braintree in Essex. It is hoped to do something similar at Westwood. The nearest station, West Calder, is four miles away and there is an adjacent FirstGroup bus depot. So a free bus link could be established.
Freeport is not the only factory outlet operator, Cheshire Oaks, which is being sold by its joint owners BAA and McArthur Glen, is another. Retailers such as Storehouse have their outlets.
Freeport's chief executive Sean Collidge reckons there is room for 20 major factory outlets and 30 smaller units and he is aiming to be the market leader.
Collidge set up the business in 1994 and freely admits he took the concept and even the name from the US, where factory outlets account for some 5% of retail sales. He obtained first-hand experience of the factory outlet concept when he was managing director of the Milletts and subsequently Jumpers chains.
Freeport is more akin to a retailer than a property company as the rent it charges tenants is related to their turnover, subject to a minimum. So choice of
tenants is clearly important and it is in Freeport's interest to market its centres to consumers.
Minimum sales which must be achieved by tenants is #200 per square foot and in practice they vary from #300 for houseware products such as china and glassware to #900 for fashion outlets.
Paradoxically, Christmas is not the best time of year for sales as shoppers look for gifts in the High Street. Autumn is usually the best season and there has been no sign of a downturn, unlike the experience of most retailers. However, Freeport would be vulnerable to a recession like everyone else.
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