Spotlight: London Designer Outlet

Walking towards the Wembley Stadium on the way to London Designer Outlet, it’s clear from the wall of cranes and steel girders that this is an area on the up. Just five years ago though, it was a different landscape.

1043
London Designer Outlet

Caishen, the Chinese god of wealth often depicted riding a black tiger, is believed to bestow riches on his devotees.

Throughout the Chinese New Year celebrations his name is often invoked, and friends greet each other with the phrase “gongxi facai” meaning “may you grow rich”.

If you’re unable to make it to his temple in Zhouzhi for Chinese New Year this weekend, try your luck in Wembley at the London Designer Outlet (LDO), as Caishen will be making an appearance.

Although the god of wealth is the official mascot for this weekend’s celebrations, his presence seems particularly apt as prosperity has certainly been bestowed on LDO, largely in the form of Chinese tourism.

Walking towards the Wembley Stadium on the way to LDO, it’s clear from the wall of cranes and steel girders that this is an area on the up. Just five years ago though, it was a different landscape.

“We opened in the end of October 2013, so we’ll be five years old at the end of this October,” LDO centre manager Sue Shepherd told the Retail Gazette.

“The centre opened about 70 per cent let. In the first two years a lot of the work was about bringing in more and better tenants.

“Two and a half years ago we realised there was a real opportunity here from our tourist business.”

According to the centre’s guest experience and tourism manager Robert Galway, 18 per cent of visitors are from outside of the country, with a large majority coming from the Middle East and China.

In fact, non-UK tourism grew around 20 per cent in January compared to last year.

To put these volumes into perspective, LDO welcomes more people annually than Wembley Stadium and the SSE Arena in Wembley Park combined, thought to total around seven million.

A key driver of these numbers is Shepherd and her team’s focus on accommodating foreign shoppers. According to Galway, members of staff in all of LDO’s tenants have had training so they understand what is considered courteous in Chinese culture, what big sellers might be in the market, and even “very simple words and phrases to use with Chinese tourists”.

It is also one of the first places in the UK to offer tax-free refunds on site. This means foreign shoppers no longer need to go to Heathrow and queue to get their VAT tax refund done – it can be done directly in-store at LDO.

What’s most important though, is LDO’s tenant mix.

“We were lucky in that we had many of the brands here anyway that resonate with the Chinese tourists” Shepherd told Retail Gazette.

“One of the most popular brands is Clarks. They see Clarks as a quintessentially English brand, that always does very well. They love The Body Shop and Holland & Barrett for all the alternative remedies.”

Often securing the right tenants can be far from easy for outlet centres. Selling at a discount can ring alarm bells for many brands, threatening to cannibalise their full price sales and detract from their premium reputation.

However, LDO has a unique relationship with its tenants, not least because it effectively proved to them that outlet sales can only be a good thing.

“We’ve invested in really good research which has been able to prove demonstrably that the impact of wholesale accounts from outlet is tiny, it’s something like 0.1 per cent.” Shepherd explained.

“If you open here and you’re already open in Brent Cross for example, we’ve been able to prove the difference to sales, if any at all, is around 0.1 per cent. That makes everyone feel a lot more comfortable.”

Just like its relationship with its customers, LDO seeks to maintain a very close and “symbiotic” relationship with its tenants.

This is largely because the retailer’s rent prices are revenue-based, therefore if they do well, the centre does well too.

“We work very much as a partnership with the tenants,” Shepherd said.

“We have a very different culture here to other centres. We believe that you can’t over-communicate with tenants, you have to keep them up to date particularly here with everything going on with events.”

LDO’s success has driven investment in the wider Wembley Park. The cranes and steel littering the skyline will soon be transformed into new hotels, retail stores and restaurants, alongside plans for the UK’s third and largest Boxpark precinct.

Whether it is being looked down upon by Caishen, or whether LDO has hit on a winning formula, it looks unlikely that Wembley Stadium will be the biggest draw for the area any time soon.

Click here to sign up to Retail Gazette’s free daily email newsletter