A showcase for brand names

The Prague Post

New airport mall will be the first outlet center in the central Bohemia region

Shopaholics will soon have a new reason to open their wallets: A brand-new outlet mall is being built near Ruzyně Airport.

“Construction has begun and we plan to open in March 2008,” says Kitty Valerianová of EDConsulting, the company handling the marketing and leasing for Outlet Airport Praha.

EDConsulting is an Italian firm specializing in marketing, leasing, project building and property management for shopping centers, retail parks and outlet centers. The firm has handled projects in Italy, Spain, Portugal, France and Brazil; this is its first in the Czech Republic.

The interior design will simulate streets and town squares that channel shoppers in a circular flow through the mall.

According to Eric Daguin, EDConsulting’s managing director, the timing is right for an outlet mall here. “Five years ago, no,” he says. “But Prague has matured, and there are many shopping centers, so it’s easy for stores to move their brands to an outlet.”

While a familiar concept to Americans and most West Europeans, the outlet idea is still relatively new in Central and Eastern Europe. Most outlet malls are made up of “”brand”” stores — that is, stores that carry only one name brand, usually items left over from last season’s stock. Because they’re leftovers, there’s no telling what you’ll find on the shelves.

Valerianová expects there’ll be a learning curve for consumers and shop personnel alike. “A lot of people will have to learn what an outlet means,” she says. “The collections will be at most 2 years old, and they may not have all sizes and styles. What you see is what you get.”

Daguin believes that, given the opportunity, the idea will take hold and grow. “Timing is important,” he explains. “Countries need to develop their retail markets before outlets can come in.”

He estimates there are about 160 outlet malls in Western Europe, while Central and Eastern Europe have about 20. So it’s a new frontier for the company, which is looking to Budapest, Krakow and Moscow for its next outlet ventures.

A huge market

How will Outlet Airport Praha change the regional shopping environment? The Czech Republic currently has only one other outlet mall: Freeport in south Moravia. That gives the Prague outlet mall a large territory to itself, and officials expect not only to attract local consumers, but shoppers from neighboring cities such as Plzen, Pardubice and Karlovy Vary, as well as travelers passing through Ruznye Airport.

“Residents in cities outside of Prague don’t have the opportunity to buy name-brand goods,” Valerianová says. “We expect 3 million visitors the first year.”

Daguin also likes the area’s potential.

“The location is very good,” he says. “Prague has many shopping facilities, but we aren’t inside Prague; we are focusing on the catchment area outside of Prague. Plus, we won’t be competing with the downtown shops.”

The airport should be a good source of departing passengers looking to use up their leftover Czech crowns.

“We are going to have a free shuttle bus from the airport, five minutes each way, and we’ll have a flight timetable inside [the mall],” Valerianová says. “The airport sees 12 million passengers yearly, so we should get some people.”

And once those people are in, they will be enticed to buy.

“The concept is to direct customers in a circle,” Daguin explains. “Entrances are at either end, and paths down the middle have created four ‘islands.’ These islands create squares, which will be decorated based on themes.”

“The outside is simple, but inside it will be like a city,” Valerianová adds. “There will be ‘streets’ and ‘squares’ offering entertainment and nearly 200 shops.”

About 50 percent of the space has been leased already, mainly to fashion stores such as Hugo Boss, Dolce& Gabbana, Calvin Klein, Nike and Adidas. Personal items, home products, services and a food court add to the offerings.

“Most important is the brands,” Daguin says. “All the shops will be mono-brands, and they must discount items between 30 percent and 70 percent — this will be in their contracts. All items will be tagged with the original price and the discount, so customers can see the difference.”

Working both ends

Retailers also like the outlet concept, and Daguin believes there will be merchandise coming not only from stores in the Czech Republic, but also from countries such as Germany, Austria and France.

“This is good for the retailers; it helps them keep their margins,” he says. “If something didn’t sell well, they still have an opportunity to get rid of the stock. And it helps for a better regulation of prices between the outlet and downtown.”

Smart retailers can use outlets as an additional service to their customers or even create their own “”outlet-only”” lines.

“An outlet is a way for retailers to keep their prices level [at their main stores], but still offer a discount to their customers by directing them to their outlet,” Daguin explains. “Other producers will make lines only for the outlets as a way to offer lower-priced goods to more people. It acts as indirect publicity for the brand, with offerings for two types of customers, both the higher-end and more cost-conscious.”

EDConsulting will be doing the marketing, leasing and management of the mall, but will outsource some activities like promotions and special events. The idea of the latter, Daguin says, is to add to the citylike atmosphere.

“The space should be alive, so we’ll have special events like music and fashion shows,” he says. “But most important is the brands. The customer has to find the product and the price, and of course it must be in an architecturally nice space and environment.”