Property Times European Shopping Centres 2010 Shift to value-add ...

RetailersMany of the larger non-food retailers have reportedhigher than expected gross margin increases in recentmonths, and food retailers‟ gross margins remain solid.Clothing and footwearThis sector recovered slightly in the end of the year,helped by colder weather. In terms of occupancy, wehave seen differing trends in the mid-range fashionsectors, whereby the strength of outlook in 2010 hasbeen scaled back somewhat. However, 15% of midrangefashion operators are looking to acquire new spacein 2011.Key brands from USA, such as Abercrombie & Fitch,Coach, Williams-Sonoma, Banana Republic, J Crew andForever 21, are all looking to penetrate the UK as a firstmarket within Europe and then take advantage of theirhigh brand exposure to secure prominent sites withinGermany, Spain, Poland, Sweden and France.FranchisingMany retailers have also been looking to mitigate theseoccupational costs by employing a franchise model. Ofthe high number of retailers in 2010 who were questionedon their entry strategies for new markets 63% of thesample stated that they would enter new markets onlyunder a franchise model. Franchising has become anincreasingly important method of retailer expansion.As example, some of these retailers include Ahava - thekey cosmetics chain within Israel: its new products aresold in concessionary form - and it will look to newmarkets through a risk-mitigating partner. The same istrue for the Fox group and their stable of brands,including Laline, Saks, Fox Home, and Fox Womenswear.Castro, an Israeli jeans brand similar to Pepe Jeans, isactively looking for stores in new and emerging markets,but again, with risk being apportioned on the operationalside through a franchise partner.Box 2Abercrombie & FitchAbercrombie & Fitch entered the European market in2007 with its London flagship store and has opened anumber of Hollister-branded outlets. Since then, thecompany has opened stores in Milan in 2009, and inGermany, Spain, and Denmark in 2010. Paris,Stockholm and Dublin openings are expected in 2011.NikeNike announced plans to grow the brand in all six ofits geographies including driving mid single-digitgrowth through broader expansion in its developedgeographies in Western Europe. Additionally, Nikeplans to invest aggressively in its developing marketgeographies like CEE. The latest illustration of thisplan is the opening of its largest Romanian store inBanesa Shopping city.A table presenting the expansion plan of major brandsacross Europe is available on the appendix on page 16and 17 of this report.www.dtz.com 6