“Half of the customers at L’Oréal Outlet no longer buy our beauty products in supermarkets”
In the end of 2014, L’Oréal Paris opened a full price store covering 100 sq.m GLA in Milan
At the origin, outlet malls used to host fashion and footwear retailers, eager to destock past-season items. They are now attracting more diverse retailers as they report a double-digit sales growth. Sophie Baqué met Delphine Leblanc, Director Retail and Clearance at L'Oréal, and Ken Gunn, Director of the consulting agency FSP Retail.
Sophie Baqué: Why did L'Oréal open its first outlet store in Italy in 2013?
Delphine Leblanc: This new retail store opened in June 2013, in the Franciacorta outlet mall near Bergamo. We decided to open this store to prove our commitment to sustainable development. Two years ago, L’Oréal was facing a paradox as a manufacturer. On the one hand, our firm in France had been rolling out an array of sustainable strategies for five years (lower energy consumption and carbon impact, zero waste target, etc.). On the other hand, we were causing environmental problems by destroying obsolete products, as the Group had no other options. As L’Oréal is a manufacturing-oriented firm, our move into retail was a great challenge…
Sophie Baqué: Can you please showcase the outlet sector.
Ken Gunn: If we look at Europe (including Russia but excluding Turkey), there are 220 outlet centres, covering an average of 15,500 sq.m GLA. A typical brand village has a catchment area of at least 2 million people living up to 90 minutes travel by car. In 2014, the turnover of European outlet centres reached €11.7 billion in total and grew by 10% from 2013 (+8% like-for-like). This two-digit growth rate has been steady since 2008. 72% of the Europeans live within a 90 minute drive from an outlet centre and 56% live within 60 minutes. In terms of total floor space provision, UK is n°1, Italy is just behind (n°2) and France is n°3…