From Milan’s Fashion Week to shopping along the Via del Corso in Rome, the Italian retail market for clothes, shoes and handbags looks, feels and smells luxury. Even the brands — Armani, Ermenegildo Zegna, Versace and so many others — sound so quintessentially Italian. Underneath the gloss, however, the keenest jockeying for place in Italy may not be on the big-city High Streets, where the Dolce & Gabbanas of the world tend to congregate, but over at the other end of the market: the outlet shops.
It once seemed that London-based McArthurGlen Group, which has outlet shopping center developments across Europe, would
dominate this part of the Italian market, given its outlet centers near all the country’s bigger cities: Florence, Milan, Naples, Rome and Venice. But competition has been heating up: Bergamo-based retailer and real estate company Percassi Group has been opening its own string of outlet centers. And the famous and expensive names of European fashion have taken to the outlet business in Italy, just as they have in the U.S. Percassi’s Sicilia Outlet Village, which is within driving distance of all Sicily’s major population centers, boasts about 130 tony tenants — Calvin Klein, Dolce & Gabbana, Gucci and Versace among them.
Percassi’s corporate structure is much more European than American in that it is a retailer with numerous brands and stores throughout Europe. Moreover, it is a shopping center developer as well. The company built one of the largest malls in Europe, the roughly 200-store Oriocenter, opposite Bergamo’s Orio al Serio Airport, considered Milan’s secondary airport. The company moved into the outlet shopping center world with the Franciacorta Outlet Village, on the outskirts of Brescia, in Northern Italy; and the Valdichiana Outlet Village, in Central Italy’s province of Arezzo, before opening Sicilia Outlet Village in 2010. Percassi has plans to open the Torino -Outlet Village next year, and meanwhile is at work on restoring and expanding the San Pellegrino Terme spa resort. Then, in 2017, the company expects to open another major shopping mall, this one in partnership with Westfield and in Milan, which is to be called, suitably enough, Westfield Milan.
Oriocenter is scheduled for a third-phase expansion, as is Sicilia Outlet Village. Sicilia Outlet Village opened measuring 26,000 square meters (nearly 280,000 square feet), and the second phase, completed last year, added 4,000 square meters. The third phase is scheduled probably for next year. Sicilia Outlet Village is “95 percent occupied, with just four units vacant,” said Omar El Jarrah, the shopping center’s marketing operations manager.
Part of the reason for the success of Percassi’s outlet centers is that the company has managed to avoid direct competition with McArthurGlen beyond the crowded Northern Italy markets. Sicilia Outlet Village was the first of its kind to be developed in Sicily; the location is somewhat central to the island and accessible to the 4.2 million inhabitants. It is situated right off the Palermo-Catania motorway and about 90 minutes from the island’s three big cities: Catania, Messina and Palermo.
Sicily attracts about 5 million tourists a year, and Percassi has extended its marketing campaigns directly to that portion of the industry. “Tourism is very important,” said El Jarrah. “Every year we are increasing partnerships. This year we will have our brochures in over 1,000 hotel rooms in Sicily. Recently, a tour group from Japan arrived and spent the entire day here.” In addition, the outlet center markets extensively to its local base through entertainment and contests. Some 20,000 people showed up for a concert under the stars with concept show Dire Straits Legends.
Perhaps the center’s most successful promotion is the catwalk show -unveiling the autumn-winter collection of designer brands and which draws aspiring young models through a contest titled Model For a Day.
“The contest gives male and female Sicilians the opportunity to become a real professional model,” said El Jarrah. “We have a partnership with a modeling agency in Milan, which works with the two top male and female winners. Last year the guy that won the contest became a top model. We invited him to be here for the annual promotion, but he could not attend, because he was in New York for that city’s Fashion Week.”
The Sicilian Outlet Village website has seen upwards of 500,000 visits, and the center’s Facebook page boasts some 70,000 friends, according to El Jarrah. “Social-network interactions continue to increase,” he said. This year the outlet center is on track to exceed 2 million visitors, up 15 percent from last year. Without being specific, El Jarrah says sales have been growing every year.
The success of the outlet centers is not unexpected, as the company operates a number of retail chains under its own umbrella, of which the best known in Europe is Kiko Milano, which operates stores across eight European countries and has had a few openings in the U.S. The company acquired another cosmetics brand, called Madina, and has launched the Womo brand, dedicated to men.
Also in the Percassi portfolio is a men’s apparel chain called Billionaire Italian Couture, launched in 2007 in partnership with businessman Flavio Briatore and now operating in global locations that include the U.S. The company also operates five Ferrari stores in Italy.
Percassi sees no irony in having such names as Billionaire Italian Couture, Ferrari and Kiko Milano at an outlet center. After all, everyone loves a bargain — even billionaire Ferrari owners.
