The following research report contains market research, analysis, statistics and business intelligence relating to research on The Rise Of Factory Outlets.

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ABSTRACT
The phenomenon of factory outlets that swept the United States in the 1990s is just coming to Italy, but it is taking off fast and will provide an entirely new distribution channel for apparel manufacturers as well as others in the consumer goods sector. To date, ten outlet mall projects have been proposed in Italy. Not all of these may come to fruition, but certainly the coming years will bring a proliferation of these centers. This was the topic of discussion at the forum "Factory Outlets in the Fashion Sector" hosted by the Polimoda fashion design school in Florence on October 16, 2001. American companies Prime Retail and Winston and Strawn gave presentations on the state of the outlet market in Italy.

Prime Retail, one of America's leading shopping center developers, believes the European market is ripe for the arrival of outlets. In the U.S., there are currently 5,393,000 square meters of outlet retail space for 275,000,000 consumers. In Europe, there are currently only 888,000 square meters of outlet retail space for 375,000,000 consumers. Furthermore, the globalization of brands and tastes would likely make many U.S. outlet tenants popular in Europe.
However, there are many differences between the U.S. market and Europe that developers and manufacturers need to take into consideration. Building permits are much more difficult to obtain in Europe and zoning laws are more stringent. Stores sizes and designs are different. Rental structures are different--generally placing more emphasis on turnover in malls. The tenant mix and cultural preferences vary.

Despite these differences, outlet shopping centers have been very successful in the United Kingdom and France, and Italy should follow suit. Currently, Italy remains dominated by small individually owned stores. In the apparel field alone, there are 113,000 shops, the largest number of any European country. Overall, large scale distribution such as department stores account for 37% of Italian spending on consumer goods. This figure is expected to rise to 47 % by2007.
Of the 113,000 apparel stores, 2,451 are stock houses, or stores that sell excess inventory and unsold merchandise. These stores have an annual turnover of approximately $2.5 billion. As manufacturers have no control over this retail channel, speakers at the forum offered outlets as an attractive alternative because they allow manufacturers to eliminate excess stock while protecting brand image. They would also eliminate the market for fake merchandise by providing luxury goods at low prices to consumers who can't afford to pay full price. Furthermore, speakers argued that outlets in Italy would benefit--and not threaten--traditional retailers by providing them with a destination for unsold merchandise.

In Italy, there are currently two outlet malls open for business and ten on the table. Prime Retail and its Italian partner SVIM are building one of these projects at Santhia between Milan and Turin. The project will be built in the form of a castle and aspires to incorporate the American concept of a village-style mall and the Italian experience of shopping along a boutique-lined city street. The tenants of the project are yet to be determined, but the project may include both leading Italian and American brands.

Currently, some Italian manufacturers have their own outlets, which are developing into larger centers. In 1996, Gucci opened its first outlet in Italy. Due to the success of the store, Gucci is evolving that outlet into a shopping center. The center currently handles six brands and soon will host 18 Italian brands in apparel and accessories.

The rapid development of factory outlet centers in Italy is a trend which may provide trade opportunities for apparel and consumer goods companies, shopping center developers, building contractors, and others.

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Mens Womens Childrens
Region: Italy
Industry: Retail
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000342