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Outlet shopping options set to expand in ČR

Three centers planned to open through 2008

By František Bouc
Staff Writer, The Prague Post
March 14th, 2007 issue

UK-based development company LMS Outlets and Denmark’s TK Development are set to launch a wave of mega-sale shopping when they open their joint venture, Prague Outlet Center, in the Štěrboholy district, located 25 minutes east of central Prague.

The two companies announced the start of construction in early March of the 1 billion Kč ($46.6 million) shopping center, which will sell brand products — mostly clothes and shoes — left over from last season and brands new to the Czech market. When the complex opens in November, it will host 80 tenants, including restaurants, cafés and other food facilities.
“Czech people love shopping,” LMS Outlets Managing Director Graham Coxhead said. “We are convinced that the main idea of outlets — to offer surplus stocks and the previous season’s collection of trendy and branded goods of a top quality for constantly discounted prices — will be very attractive to Czech customers.”
The next wave
Although outlet centers developed in the United States, they began spreading in the mid-1980s, and there are currently about 120 in Europe, mostly in Italy, the United Kingdom, Germany, France and Austria. The idea has yet to be tested on a large scale in the Czech Republic.
So far, only Freeport Excalibur City has set up shop, opening on the Austrian border in Hatě, south Moravia, in 2003.
In addition to the Prague Outlet Center, Outlet Airport Praha will open in the vicinity of Ruzyně Airport in 2008.
Before it does, another center, Exit 66, located 66 kilometers (41 miles) from Prague, on the highway to Brno, south Moravia, will open.
According to Eric Daguin, managing director of EDConsulting company, which is handling the marketing and leasing for Outlet Airport Praha, the timing is right for this market.
“Five years ago, no,” Daguin said. “But Prague has matured, and there are many shopping centers, so it’s easy for stores to move their brands to an outlet.”
Pavlína Hajnová, an executive from the Centers Europe real estate consultancy, said outlet centers have become a new target for real estate investors looking to secure major new Czech development projects. As a result, she said, such centers are likely in other major municipalities throughout the country.
Brands key
The evolution of Czech outlet shopping centers is a natural phase of local retail development, Patria Finance economist David Marek said. With the market becoming saturated with hypermarkets and specialized shops, he added, there’s now room for outlet malls and demand for discounted brands.
“These outlets will appeal especially to cost-conscious people with lower incomes,” Marek said, “because they’ll enable them to buy top brand products at very discounted prices.”
Representatives of the outlet centers have announced that discounts in their shops will be as big as 30 percent to 90 percent of the original prices.
As a result, Marek said, the centers will put pressure on other clothing and shoe retailers to keep prices low.
Tomáš Drtina, an analyst for retail market monitoring company Incoma Research, said the new outlet centers could also take customers away from traditional shops.
Initial success at the outlet centers will be determined by the selection of brands on offer, Drtina said.
While introducing their plans and strategies for the centers, none of the developers so far is willing to reveal just what brands will line the shelves and fill the windows.

František Bouc can be reached at fbouc@praguepost.com


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