Managing Director of FASHION HOUSE Group Brandon O'Reilly "about why it is now more profitable for former customers of Warsaw and Milan outlets to buy in Moscow and St. Petersburg, how outlets without a roof still don't work in Russia, and how many more sale projects the Russian market will withstand.

 

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– Russian outlets have been accused more than once that they sell "fakes made especially for Russia".

 

– Over the years of our work in Russia and Eastern Europe, we have never encountered anything like this. For example, Nike Factory Outlet: the company produces a special collection for outlets, and, of course, these are by no means fakes. Let me remind you that usually our tenants are just manufacturers of the goods being sold, much less often they are franchisees or other representatives working with copyright holders under a contract. But fakes in both the first and second cases are excluded.

 

 

– It turns out that «collections for outlets» really exist and brands not only sell remnants of old collections?

 

In the USA, up to 35% of the goods sold in outlets are exactly "MFO" goods, that is, "goods made for the outlet". However, in America they came to this after 30 years of outlets. In Russia, the outlet market can still be called developing, so it's too early to talk about such a trend. There are still enough remnants of collections and there is no need to produce something specially. Perhaps in 10–15 years, collections created specifically for outlets will also appear in Russia. By the way, even in England, collections sewn for outlets are only now appearing, despite the fact that the local market of the format is about twenty years old. And most importantly, such collections do not contradict the concept, but on the contrary, they shade and emphasize it. If someone is interested in buying a product of a certain brand, he knows that when he arrives at the outlet, he will find the right product there.

 

In that case, Mr. O'Reilly, how competitive do you think the outlet market in Russia is? And how many more outlets will the country withstand?

 

You see, the outlet concept has not yet become widespread in Russia. This is a huge and promising market, and in the next five to eight years it is quite possible to open about 20–25 large outlet centers in the country. So far, a large group of tenants does not understand and does not consider the concept of outlets. Dynamic expansion of the market will be possible if the outlet industry makes great efforts and spends a lot of time on training potential tenants. I am sure that our efforts in this area will soon be rewarded.

 

 

The Russian retail and retail real estate market is relatively young and quite complex, but it is still called one of the most interesting in the world. What do you think is the difference between Russian and foreign outlets?

 

To create a good pool of tenants, you can go two ways: rely on mass-market brands or build a harmonious combination of popular and luxury brands. More than a decade ago, a typical outlet center consisted mainly of multi-brand distributors. Today, projects in Central and Eastern Europe, as well as in Russia, have become attractive for the luxury segment. It is already difficult to find commercial real estate in Moscow that does not offer a wide range of luxury goods. Mass brands are more widely represented in St. Petersburg and other cities where people have more limited incomes. After all, it is important not just to sign more lease agreements in order to rent out the space, but still to use them as efficiently as possible.

 

The ending follows

 

Evgeny Arsenin talked

Photo:FASHION HOUSE Group