Mcmillian DOOLITTLE Fg.Indd

The monthly digest of international retail < N° 16-169 > December 2015

THE INTERVIEW

IKEA-CENTRES RESTARTS EXPANSION IN RUSSIA

EDITORIAL German Armin Michaely, aged 54, has managed Ikea-Centres Russia since March 2013. After 22 years at the German offi ce, he has restarted mall AFTER THE CAMERAS HAVE GONE expansion in Russia, which previously stopped in 2012. Sophie Baqué met an inspiring and confi dent business leader to fi nd out why it is the right As terrorist attacks increase in the U.S., France, time to enter Russia. Mali, Kenya, Egypt, Tunisia and the Gulf, we offer our condolences to all those who have been affected by tors. When European colleagues visit us, they these tragic events. Our thoughts are with all of the victims and their families. are surprised to see that 3 Mega malls in Meanwhile, life continues, offering new surprises Russia have as many customers as 50 Ikea and innovations. There is a notable desire among stores in Germany. Millennials to share and experience new ideas. In Singapore, Muji saw sales take off with the addition of an in-store cafe. In the U.S., Urban Outfi tters could Are malls launched during the good times soon set up restaurants selling pizzas within its in Russia now struggling to fi nd tenants? boutiques. In this edition of Global Retail News, you Last year, our business in Russia was resil- will see how some mall operators are installing art ient. The vacancy rate remained at 1.4%. galleries in malls. During this Christmas and New Year, let’s refl ect on Annual sales of our tenants grew by 7.5% this year’s innovations and look forward to next year’s in rubles. Of course, Russia is in a recession trends. (G.D.P. will fall by 4% this year). But the coun- Neil Stern try has the largest population in Europe at Senior Partner, McMillanDoolittle 146 million people and it’s not unusual to have economic cycles here. A crisis also offers opportunities for retailers and I believe P.4 Armin Michaely it’s the right time to invest in Russia. If you INTERNATIONAL Sophie Baqué: Could you showcase the are prepared to face a crisis, you are more fi rm Ikea-Centres Russia? successful when the economy recovers. Why do retailers increasingly mix retail and food? To counter e-commerce growth, Armin Michaely: Ikea-Centres Russia is the retailers such as Muji, Urban Outfi tters and Casino country’s largest shopping center owner, with Several retailers like New Look, Gerry We- are investing heavily in food experiences… 2.2 million retail sq.m. We have been active ber, Esprit, River Island, OVS, and Amer- for 15 years and we run 14 malls (3 in Mos- ican Eagle Outfi tters closed in Russia… cow, 2 in St. Petersburg and 9 in the regions), Of course, a few retailers left but many P.5 all with an Ikea store and hypermarket as an- stayed such as Forever 21, H&M, Mango and chor tenants. We are a part of Ikea-Centres, Inditex. Turkish retailers are also expanding EUROPE which runs 3.2 million retail sq.m of malls here, such as fashion brands LC Waikiki (5 Yellow Korner, the concept of the and “retail parks” in 14 countries, including new stores) and De Facto (3 new stores). month. Lourens Verweij, from Ebeltoft Group, 69% in Russia. Opening in Russia is easier for retailers from showcases this original concept, which is part decor and part art gallery ... Turkey than for those from the U.S., Europe How many customer visits do you get at or Asia. Turkey is closer to Russia from a geo- your 14 malls? graphical and cultural point of view. 50% P.8 The malls attracted 275 million visitors in of Mega malls’ tenants are international the fi scal year to August 2015, an increase brands, with 70% from the fashion sector. MIDDLE EAST of 2%. Traffi c in 2014 was up by 4.5%. Our Will Iran soon reintegrate into the largest mall, Belaya Dacha in Moscow with In Moscow prime retail rents dropped world’s economy? After 20 years of limitations 225,000 sq.m GLA, and 320 stores, attract- by 44% on Tverskaya Street. What about for multinational retailers, malls are now mushroo- ed 40 million visitors last year (up 3%). Our Mega malls? ming in Iran… smallest center at Mega Kazan, covering It is diffi cult to give an average as rents vary 91,900 sq.m GLA, reported 14 million visi- by sector, store size and location within the

mall. Monthly rents can vary from €10/sq.m Why did Ikea decide to build malls in for a low-margin hypermarket to €100/sq.m Russia? for a very profi table shoe store. Since 2009, I don’t want to be arrogant, but we invent- Ikea-Centres Russia has operated with con- ed the Russian shopping center model 15 tracts in rubles. There is a massive difference years ago. Our European experience proved with leases priced in US$ or € from our that other retailers benefi ted from Ikea’s traf- competitors. The recent currency fl uctuation fi c, but not in a concerted manner. Russia confi rmed that our ruble-based policy has a did not have integrated shopping centers strong advantage, as tenants earn and pay in 2000, so we took advantage of this add- in rubles, regardless of currency devaluation. ed-value by offering everything under one While US$ and € denominated rents caused roof. By comparison, we have 3 integrated an average rental increase, our contracts malls and 15 standalone Ikea stores in Chi- This farmers market opened in December at Khimki Mall have not been affected by any devaluation na, with less land available. (Moscow) in Russian currency. It provides more stability and predictability for our tenants. What do you like the most about your job? cities (Millionniki) and this is our 1st prior- Russians are very open to buying and selling. ity. Ikea-Centres Russia is in the purchase How do you manage to attract foreign re- The speed of change and increased freedom phase for sites in Chelyabinsk, Perm and tailers? are quite impressive. Once you make a deci- Krasnoyarsk. For many retailers, Moscow is Ikea-Centres offers an entry-level package sion and have investors on board, an Ikea the gateway to Russia, but regions also offer with many services including fi scal and store can open within one year and a mall opportunities. We are also looking for space property registration for new retailers. I do within 2 years. Russia is a huge country and in Moscow and St. Petersburg. In Voronezh not recommend franchising in Russia, as it is there are no restrictions on the size of sites. (southwest), we have obtained the building better for retailers to operate directly. As most In Germany or England, it would be almost permit for a standalone Ikea store. For the contracts run for 3 to 5 years, this allows for impossible to build a mall with 150,000 to Mytischi mall project (230,000 sq.m GLA new tenants and the opportunity to replace 200,000 sq.m GLA. In Russia, you can build in Moscow and €500 million investment), those performing poorly. Discount retail has as large as you want. It is a nice environment we are in the process of obtaining all agree- not developed in Russia, so this is defi nitely to invest in and to see things changing. ments, with opening planned for late 2018. a new opportunity. This will be our largest mall in Russia, with What has surprised you the most in Rus- services like children’s entertainment, cook- Could you describe a typical Mega mall sia? ing classes, music classes and a food court. in Russia? Customer mentality is different, Russians We have two sizes. For Moscow, the average shop anywhere and anytime. Stores and In 2014, domestic consumption account- area is 200,000 sq.m GLA (220 stores). In restaurants are open 365 days a year with ed for 50% of Russian G.D.P. vs. 37% in the regions, it is 130,000 sq.m GLA (165 longer operating times. Since 2013, Ikea is China. Did you see a shift with the crisis? stores). Each center includes an Ikea store, open from 10am to 2am. We moved closing Russians are focusing on food and daily an Auchan hypermarket and a D.I.Y. store, time from midnight as studies showed needs. Regarding home furnishings, many usually Leroy Merlin or Obi. that hourly transactions doubled Russians live in urban apartments and they between midnight and 2am! prefer to invest in dacha/ summer homes. You are launching a farm- The Russian Several Obi D.I.Y. stores are Home furnishing stores Hoff from Austria and ers’ market in a Moscow mentality is open 24 hours, so it is Crate&Barrel from the U.S. are active in Rus- mall. Can you tell us different. People are normal to shop at mid- sia, with smaller stores. As a professional mall more? used to driving up night to avoid Moscow’s operator, we are happy to offer them space in In Khimki’s mall (north traffi c jams. some Mega malls to optimize our retail mix. of Moscow), we opened to 4 hours to a mall We don’t try to protect our anchor tenants. a farmers’ market cover- and shopping until Does the massive size We are discussing a location with Hoff in our ing 750 sq.m GLA in early midnight of Russia change con- future mall of Adygea-Kuban (Krasdonar). December. Local producers sumption patterns? -farmers, bakers, butchers- sell Catchment areas are huge, so A last word to conclude? fresh and local products directly to cus- Russians drive for up to 4 hours to Short-term oriented retailers can’t succeed tomers. I am looking forward to seeing the visit a mall. Sometimes, they stay overnight in Russia because the market is mature. It’s results. We are also upgrading and extend- to spend the whole weekend. In Omsk, our not about launching a unique offer, as the ing Khimki’s food court from 6,000 sq.m to Mega Mall attracts many customers from competition has already arrived in force, with 10,000 sq.m GLA (over 12% of the mall’s Kazakhstan. In Russia, a shopping center is plenty of local experience. Auchan, Obi and GLA). Food retail is becoming increasingly an attraction in itself. Our sites in Moscow Leroy Merlin are getting bigger. Ikea-Centres important in our malls, as customers spend and St. Petersburg have a profi le similar to has invested 15 years in Russia and we are more time eating out. 30% of visitors come those in Europe. known as a landlord who understands Rus- to Mega for meals. Cafes and restaurants sian retail. In summary, I believe that every now cover 6% of total space and we want to Do you have other openings planned? international retailer should have a presence grow that to more than 10%. We still have not covered many regional in Russia.

sing team asked for a US$548,300 bribe example, the Belaya Dacha Mall in Mos- to place a catering product in X5 stores. cow will be home to a government State “Personal corruption is endemic in any Store, allowing customers to obtain birth, business relationship in Russia. However, death, marriage and passport documents. it is quite rare that such a case involves police intervention,” said Alexis Nekrasov, According to the pro-government newspa- Director of Russia Beyond the Headlines. per “Izvestia Daily”, the average amount of bribes doubled in Russia between

A Karusel hypermarket (X5 Retail) In the case of Ikea-Centres, frustration 2014 and 2015, reaching US$3,000, as over corruption at all levels has created the ruble has fallen in value against the In September, a corruption scandal tension in the past between the mall US$ dollar. “Civil offi cials are used to ta- broke that involved Russia’s 2nd largest operator and the Russian market. Exaspe- king bribes in US$, or fi xing amounts to grocery retailer X5 Retail, which owns rated by bribery attempts, the fi rm halted the Central Bank’s exchange rate,” said Pyaterochka discount stores, Perekrestok any further expansion in 2012. In 2015, Dmitry Chugunov, a member of the Public supermarkets and Karusel hypermarkets. however, there appears to be a healthier Chamber. A Perekrestok executive from the purcha- relationship with local authorities. As an

LOOKING FOR VALUE CONSUMPTION. HOW SALES OF FOOD AND BEAUTY REMAIN RESILIENT

Value change of Russia’s retail sales by segments from 2011 to 2015 (Source: PMR, Russia Federal State Statistics Service)

Category 2011 2012 2013 2014 2015 *

Grocery 13.8% 9.5% 11.7% 11.8% 11.5%

Consumer electronics 13.1% 14.1% 9.5% 11.1% -9.9%

Cosmetics 16.6% 13.8% 13.1% 11.0% 8.7%

Clothing 12.1% 11.2% 7.1% 8.6% -8.2%

Footwear 9.5% 12.7% 5.3% 7.7% -7.1%

Today, almost all global retailers are consid- Total clothing& Footwear 11.5% 11.5% 6.7% 8.4% -8.0% ering some form of reduction in exposure to D.I.Y 11.7% 16.0% 6.0% 5.1% -6.0% Russian risk. By comparison, some fast food chains such as McDonald’s, Starbucks, * Forecasts Burger King, Dunkin’ Donuts and KFC are According to Rosstat (Russia’s Statistics brands, such as Chevignon, Gerry Webber, among the few players with fresh opportu- Agency) and the PMR institute, retail sales Sepalla, Esprit, New Look, OVS and River nities in Russia. Their prices are two to three fell by 8.5% in Russia between January and Island. According to a VTSIOM survey con- times lower than traditional restaurants and September 2015, showing big differences by ducted in September 2015, 31% of Russians many Russians eat there on a regular basis category. In 2015, the grocery retail market were using their savings to cover daily expen- for lunch. McDonald’s was hit by reprisals should increase by 11.5% in value and the ditures. when Western sanctions were introduced in cosmetics market will grow by 8.7%. True in- The D.I.Y market is due to drop by 6% in 2014, but business has been resilient. In Au- fl ation is expected to grow at more than 15%, 2015, as there is less confi dence in spend- gust 2015, the fi rm signed a franchise agree- whereas offi cial sources plan an annual rate ing on home renovations. Purchasing prop- ment with the Gid Llc Company to open 20 of 6%. “Russians have signifi cantly reduced erty is diffi cult as credit and loans are very restaurants in Siberia before 2020 (regions shopping expenses. They look for cheaper restricted. The consumer electronics market of Novosibirsk, Tomsk, Kemerovo and Altai). substitutes, buy private labels more often or is expected to decrease by 10%, affected by McDonald’s has been active in Russia for 25 limit the number of items”, said Bartosz Bo- lower demand and a “high base” effect. In years, with 500 restaurants in 120 cities. lecki, an analyst at PMR. “Sales of clothing 2014, Russians rushed to make home elec- and footwear will drop by 8%, but the value tronics purchases before the impact of price In Russia, spending has shifted from lux- of the shoe market will decrease slowly. Foot- infl ation. ury to value-for-money channels, such as wear is a higher priority than clothing on the Russian retail is not expected to return to Auchan hypermarkets. According to sourc- list of basic household needs”. Low-priced double-digit growth before 2020, but it may es, Auchan yields are 40% higher per sq.m. supermarkets are gaining traction and are balance out at about 7%. In the Christmas than those of some Russian retailers, such expanding their selection of fashion items. If period, spending on gifts in Russia may de- as Lenta or O’Key. we examine the dynamic of foreign retailers crease by 7% versus 2014, with a value of leaving Russia, most of them are mid-range US$238 per household.

WILL AMAZON BE THE 2nd LARGEST GLOBAL RETAILER IN 2020?

The world’s 10 largest retailers in 2020 by sales (Source: Planet Retail)

Sales 2020 in US$ Sales 2015 in US$ Retailer Rank 2020 Rank 2015 % growth 2015-2020 billion * billion *

Wal-Mart 1 1 609.0 523.9 3.1% Amazon 2 5 211.2 113.7 13.2% Costco 3 2 177.4 127.9 6.8% Carrefour 4 3 151.4 122.2 4.4% Kroger 5 4 139.6 116.4 3.7% Schwarz Group (Lidl, 6 8 134.7 103.2 5.5% Kauﬂ and) Walgreens-Boots 7 7 127.3 105.2 3.9% Seven & I 8 9 123.9 101.5 4.1% Tesco 9 6 121.9 107.7 2.5% The Home Depot 10 10 108.3 90.9 3.6%

* Forecasts

HOW TO SHOP AND EAT AT THE SAME TIME

months ago, Muji’s sales have jumped by nials account for 25% of the U.S. population, 40%. Consumer traffi c has clearly increased. and they are more willing than any other age The Cafe&Meal area draws customers into group to spend on food”, said Richard Hayne, the store. After a meal, they usually shop as C.E.O. of Urban Outfi tters. “Spending spreads well.” Muji’s Cafe&Meal has been installed to leisure and dining instead of clothing. We in 23 other stores across Japan, China believe that there is a tremendous oppor- (Chengdu), Taiwan and Hong Kong. Mim- tunity to expand the Pizzeria Vetri concept.” icking Muji’s design aesthetic, all cafes have Hayne did not say whether Italian restaurants a minimalist design, natural wood furniture would open within Urban Outfi tters stores or Sales at Muji at Paragon Mall (Singapore) have risen by 40% and serve a simple Asian cuisine with a wide as independent units. since the launch of Cafe&Meal food service. range of desserts. Eager to enhance shopping experiences In Europe, German supermarket fi rm Rewe and offer attractions beyond items for sale, In the U.S., department stores Bergdorf signed a partnership with Starbucks to roll specialty retailers are expanding food and Goodman and Bloomingdale’s are invest- out in-store cafes in 2016. Starbucks signed beverage offerings within their stores. In Sin- ing heavily in food. In November 2015, the similar deals in 2015 with an array of gro- gapore, in September 2015, the Japanese struggling fashion retailer Urban Outfi tters cery retailers such as Casino-Guichard in retailer Muji opened “Cafe&Meal” with 52 surprised investors when it announced a France (Casino and Monoprix supermarkets), seats in the Orchard Road fl agship, within takeover of Philadelphia’s Vetri Family Group KeskoFood convenience stores in Finland the Paragon Mall. This cafe covers 15% of (owner of Vetri pizzerias) for an undisclosed (licensing agreement) and Dansk Super- the store’s area at 121 sq.m. According to sum. Urban Outfi tters, whose traffi c has de- marked in Denmark. Jasmine Sng, General Manager of Muji-Sin- clined similarly to Macy’s and Nordstrom, gapore, “Since the opening of our cafe two has been testing in-store restaurants. “Millen-

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AMAZON ROLLS OUT LOCKERS IN PARIS Eataly lands in Germany. In late November, Eataly opened its 27th restau- In a ﬁ rst for France, Amazon has set up rant-store in Munich’s Viktualienmarkt in partnership with Signa Retail. This 4,600 collection lockers in a Parisian shopping sq.m store is in the former Schrannenhalle mall. The service began on December market. New stores are due in Moscow, New 3, 2015, in So Ouest shopping center, York (One World Trade Center), Boston, Los owned by Unibail-Rodamco in Levallois, a Angeles, Toronto, Paris, London and the U.A.E. western suburb of Paris. This unit has 60 In 2014, the ﬁ rm’s sales reached €400 mil- lockers. Customers collect items via a PIN lion. code and the credit card used when orde- Europe’s malls best in class. During ring on Amazon’s website. the 3rd quarter ending in September 2015, rents rose by 1.6% in shopping malls at Al- tarea-Cogedim, by 3.9% at Unibail-Rodamco and by 3.3% at Mercialys. Following its merg- TURKISH RETAILERS ARE EYEING IPOs er with Corio in 2015, the rents of Klepierre In Turkey, the grocery discounter Sok Market foreign investors, including Iranian investors, cannot be compared to 2014. Like-for-like sales at tenants’ stores grew by 4.8% at (2,800 stores, a subsidiary of conglomerate to support a future I.P.O. This underpins an Unibail, by 4.6% at Klepierre and by 1% at Yildiz Holding specializing in clothing), has aggressive strategy of external growth. By Altarea. revealed plans for an Initial Public Offering December 2015, the purchase of 10 ex-Tes- on the Istanbul Stock Exchange over three co supermarkets (Kipa) will be complete, 12 For Savills, Europe’s online re- years. Rival Bim, Turkey’s largest grocery re- months after taking over 12 Real hypermar- tail sales are still low. In 2015, on- tailer by sales, is already listed in Istanbul. Be- kets from the German Metro AG. Begendik line sales will account for 8.4% of European consumer goods (excluding travel and enter- tween January and September 2015, Bim’s forecasts sales of about US$500 million in tainment) with large differences by country. sales jumped by 11.5% like-for-like to €3.3 2015 and a growth rate exceeding 30% in E-commerce represents 15.2% of the UK’s billion (with 70% coming from private label). 2016. If SOK Market also completes an I.P.O., retail market, 11.6% in Germany, 8% in A101 will be the only unlisted retailer among France, 7.8% in Sweden, 7.4% in the Neth- Meanwhile, Begendik (42 stores) is seeking the top three discounters in Turkey. erlands, 3.5% in Spain, 3.3% in Poland and only 2.5% in Italy.

THE CONCEPT OF THE MONTH Primark opens a sprawling store in Madrid. In October, the discount fashion retailer added a 12,400-sq.m store in the Lourens Verweij, Development Manager at Ebeltoft Group, highlights Yellow Gran Via in Madrid. Primark runs 7 stores in Korner, a quickly expanding chain which is part decor and part art gallery. Madrid, 40 in Spain and 294 globally. In No- “Making photographic art accessible to ev- vember, it opened its 2nd U.S. unit of 7,500 eryone.” That is the goal of Yellow Korner, a sq.m. in the King of Prussia Mall (Simon Property). French retailer founded in 2006, which sells photographs. Yellow Korner sells photos Desigual tightens its belt. In the 1st (from Man Ray, Lee Jeffries, etc.) printed as half of 2015, sales at the colorful fashion re- limited editions. The retail concept is sim- tailer remained steady at €452 million but ple. Instead of selling 10 edited photos for E.B.I.T.D.A. plummeted by 26%. The Span- €5,000 in an art gallery, Yellow Korner prints ish group runs 548 stores in 9 countries. Consequently, the group will reduce staff at about 1,000 units, all of which are authenti- headquarters and will delay a move to a new cated. Prices vary from €19 to €3,500 for an building. In September Desigual replaced exclusive shot limited to 50 pieces. Manel Jadraque as C.E.O with founder Thomas Meyer. Yellow Korner was running 75 stores in 25 countries, covering about 120 sq.m GLA, at the end of 2014. Annual sales reached €30 million with double-digit growth. The best perform- Asda posts its 5th consecutive ing stores register 300,000 visitors a year with an average ticket of €400. More than 50% quarterly drop. In the quarter to Sep- tember, Asda’s like-for-like sales in the U.K. of Yellow Korner’s sales come from foreign countries. The company has opened about 20 fell by 4.5%. The combined market share of new stores this year in Western Europe, Bangkok (Thailand) and Chicago (USA). A launch Aldi and Lidl has doubled since 2012, reach- in Japan and additional U.S. stores are planned for 2016. In order to fi nance expansion, ing 10%, and is likely to grow to 15% on par Yellow Korner has raised €12 million since inception from investment funds and business with other European countries. According to partners, such as 360° Capital Partners and Audacia (owned by Charles Beigbeder). C.E.O. Andy Clarke, “It is going to be a very Yellow Korner has found a foothold between exclusivity, which drives demand, and avail- challenging Christmas. Our research shows that more than 20% of shoppers plan to ability, which grows the customer base. This makes photos more accessible, but does not spend less money this Christmas than in fl ood the mass market. Similar to the automobile sector, where personalization and limited 2014 and a further 68% expect to spend ranges are hugely successful with customers selecting seat covers and dashboard fi nish- the same”. Asda is traditionally the cheapest es, the customers of Yellow Korner feel unique. They have access to a high-end product, of the large grocers (Tesco, Waitrose, Sains- previously only available to the elite.” Lourens Verweij bury’s and Morrisons).

WHAT MAKES A BEST Apple launches a one-hour “click & collect” service. In the U.K., Apple IN CLASS RETAIL DESTINATION? has launched a one-hour “click & collect” According to the 3rd edition of the “City At- said Marrit Laning, Head of Research and service. Internet ordering generates items that are ready for collection in 60 minutes. tractiveness” study from Redevco, cultural Strategy at Redevco. Next day delivery is also possible for orders and historical sites are key drivers in the per- placed by 6:00pm. formance of cities. “Soft factors, such as the As the European Union emerges from a re- presence of historic monuments and other cession, the number of tourists across Eu- Ruhr Park reopens in Germany. tourist attractions, and the representation of rope grew by 3% this year. It is a key factor After an 18-month refurbishment, the Ger- creative professionals in a population, play a for retail sales, despite some differences by man mall Ruhr Park has re-opened. Owner Unibail-Rodamco increased store units from growing role in the attractiveness of cities”, cities. Amsterdam’s economic fundamen- 157 to 204 while keeping 115,500 sq.m GLA tals have lagged behind other major E.U. total space. New tenants are G-Star, Superdry, cities, but the fl ow of tourists is twice as high Europe’s 10 most attractive retail destinations Forever 21, Foot Locker, Zara and Mango. Uni- in 2015 as the rest of the Netherlands. It jumped by bail runs 27 malls in Germany. The “weight (Source : Redevco) 12% this year vs. 5% in the Netherlands. of money” from investors targeting Germany Rank New retailers such as JD Sports (fl agship), has generated a strong performance for re- City Rank 2014 2015 Calzedonia, Stradivarius and Oysho (Indi- tail property. London 11tex) have added vibrancy to Amsterdam, and Lidl invests in a delivery start- John Lewis is expected in 2016. Brighton, up. The German discount retailer Lidl Paris 22 U.K., is home to a seaside art scene with an (Schwarz Group) surprised the whole in- Munich 33affl uent population, a large proportion of cre- dustry by buying Kochzauber, a food deliv- ative professions and many boutiques. Last ery service. The fi rm delivers fresh food and Berlin 46 year, the number of tourists grew by 10.3% “food boxes” including all of the ingredients needed to cook a meal at home. This deal Hamburg 54to 2.9 million nights spent. On a European should help Lidl gain experience delivering scale Brighton ranks 34th, roughly on par with Vienna 65 fresh products. Bordeaux in France (39th) and Munster in Stockholm 713Germany (61st). “As consumers increasingly Stockmann will close in Russia. combine shopping with leisure activities in The Finnish-listed retailer Stockmann (rev- Milan 810 their hard-earned leisure time, they choose enue of €1.84 billion in 2014) is selling all 7 department stores in Russia to Reviva Amsterdam 99locations where there is more to see and do Holdings. The purchase price is €5 million Copenhagen 10 16 than shopping”, added Marrit Laning. and the sale should be complete in January 2016. Stockmann is keeping its real estate assets in Russia. Reviva also controls De- benhams’ local franchise via its subsidiary FRANCE. WHAT IS ANNUAL TURNOVER PER SQ.M? Debruss. As a result, Stockmann will record a non-recurring cost of €75 million in the 4th quarter of 2015. Comparisons of annual sales in France for 8 retailers (in €/ sq.m) (Source: Correspondance de l’Enseigne) John Lewis to partner in the Netherlands. Instead of investing in physical stores, the British department store Pandora €28,000 is expanding globally through concession agreements in existing department stores. The partnership signed an agreement with Corso Restaurant €22,598 previous rival Bijenkorf to open “stores-within-stores” covering 28 to 50 sq.m. The 1st Tacos Avenue €23,649 outlets are planned in Amsterdam, Rotter- dam and The Hague in spring 2016, with Big Fernand €18,750 further units to follow in Eindhoven, Utrecht, Amstelveen and Maastricht. John Lewis runs 7 similar concessions in Shinsegae depart- Micromania €18,750 ment stores (South Korea) and 14 in Singa- pore and the Philippines. Burger King €9,167 Albert Heijn launches a 100% Calzedonia €7,609 self-scanning store. In Amsterdam, the new Albert Heijn supermarket (opened in Hema €5,714 October) offers a self-scan purchase system for credit cards only. The number of staff is 0 5000 10000 15000 20000 25000 30000 similar to a standard Albert Heijn store, but instead concentrates on the added value of sale and services versus checkout. Will this be the standard format in the future?

WHO EARNS WHAT AT U.S. FOOD RETAILERS? A NEW YORK OUTLET

Salary sampling in the supermarket industry (US$ / year) based on the fi rm’s annual sales By the end of 2017, New York will house (Sources: Supermarket News, Austin-Michael Executive Search) Empire Outlets, its fi rst outlet center cove- Sales from Sales from Sales Position ring 35,530 sq.m GLA with 100 stores. The $0.5 - $1 billion $1-$10 billion > $10 billion Brooklyn-based developer BFC Partners has CEO 600,000 825,000 1,500,000 started building on Staten Island, with 50% of COO 365,000 620,000 770,000 space already leased. Nordstrom Rack, Gap, Nike, Starbucks and H&M are confi rmed te- CFO 345,000 470,000 610,000 nants. It will use 2,800 sq.m for cafes and CMO 340,000 470,000 615,000 restaurants. 7 million visitors are expected

CIO 270,000 350,000 450,000 per year. Empire Outlets is part of a mixed- use complex including a hotel and a world’s record 192-meter ferris wheel.

WAL-MART SUSPECTED OF CORRUPTION IN BRAZIL

in suspected bribery payments. It is alleged 558, but expansion ceased in 2013. Accor- these were bribes to speed up two store ope- ding to Morgan Stanley, Brazilian sales ac- nings in Brazil from 2009 to 2012. According count for only 3% of Wal-Mart’s revenue (net to the Wall Street Journal, Brazilian witnesses sales of US$482.2 billion in 2014, with 70% were interviewed in November to determine coming from the U.S.) An investigation of if Wal-Mart’s executives were aware of and Wal-Mart found no major offenses in Mexico, sanctioned suspected payments. but found evidence of small bribes in India. Wal-Mart made inroads into Brazil in 1995, In Brazil, the Casino Group is also alleged to After China, is Brazil enforcing a major an- but has struggled to become the country’s have paid US$115,170 to Carolina de Olivei- ti-corruption policy? While President Dilma largest retailer with U.S.-style superstores ra, the wife of the former Minister of Industry Rousseff is involved in impeachment procee- and Everyday Low Price guarantees. In 2005, and Commerce. Federal police are investiga- dings for alleged illegal ﬁ nancing, Wal-Mart it acquired two local retailers to increase ting claims of bribery, criminal action, corrup- could be involved in a bribery scandal in Bra- market share. Between 2006 and 2012, Wal- tion and money laundering. zil. Authorities are investigating US$500,000 Mart almost doubled its stores from 299 to AFRICA, MIDDLE EAST

HOME IMPROVEMENT. LAFARGE-HOLCIM OPENS A SINGLE WOMEN BANNED STORE IN IRAQ FROM RESTAURANTS

tar and insulation. According to Iqbal Omar, Saudi Arabia’s National Society for Human Retail Director of Lafarge-Holcim: “In Iraq, we Rights (N.S.H.R.) has criticized the ruling have overcome signifi cant supply chain diffi - by some restaurants to ban single women culties, given the country’s current situation. if unaccompanied by male guardians. “We Iraqis have a real need for building materials made this decision because we have seen available under one roof. Our services such numerous incidents of fl irting taking place as technical support are much appreciated”. inside restaurants, and such behavior ad- versely affects business,” said a restaurant The Lafarge-Holcim Group resulted from a owner to Al Hayat newspaper. merger between Lafarge and Holcim in July N.S.H.R. says that signs placed in restaurants 2015. Consolidated sales of both entities are against the law and should be removed The industrial group Lafarge-Holcim, the were €26 billion in 2014. The group moved immediately. With 28.3 million inhabitants world’s largest manufacturer of building ma- into retail in Latin America in 2018 and ex- and 51% under age 25, the Saudi food mar- terials, opened in Northern Iraq (Kurdistan panded into North Africa in 2010. Today, the ket is worth US$21 billion a year, posting 10% region) in early December. This store covers fi rm operates more than 600 stores under annual growth. Given the extreme weather, 750 sq.m GLA and sells 40% of home impro- various banners, such as Batistore in Algeria 80% of food products are imported. As Saudi vement and D.I.Y. products like paint, sanitary and Red Minetti in Argentina. Lafarge-Holcim Arabia offers no entertainment beyond res- goods, electrical fi ttings, and 60% of building retail stores are well established in Ecuador, taurants and shopping, households spend materials such as cement, aggregates, mor- Argentina, Morocco and Algeria. 25% of their budget on food and beverage.

LULU EXPANDS FROM THE GULF TO MALAYSIA An Uber-based promotion in South Africa. For Black Friday, Shoprite U.A.E-based Lulu Group plans to build 10 Lulu Group owns the largest hypermarket offered customers a free Uber ride to Check- hypermarkets in Malaysia via an invest- chain in the Middle East, with 118 hyper- ers supermarkets, thereby launching the Christmas season the day after Thanksgiving. ment of US$300 million over the next 2 markets and shopping malls in the Gulf The ﬁ rst 1,000 customers who signed up years. Expansion will provide 5,000 jobs to and India. In 2015, its sales are expected with Uber using a promotion code qualiﬁ ed Malaysians. “To ensure proper training, we to reach about US$7.7 billion. The group for a free return trip to any Checkers super- will take our Malaysian staff to our hyper- is about to open its 1st hypermarket in Ma- market (valued at up to US$14). Checkers, markets in the Middle East,” said Chair- laysia in February 2016 (located at Jalan owned by Shoprite, runs 230 grocery stores man Yusuff Ali M.A. Munshi Abdullah). in South Africa.

Aeropostale will land in Egypt in early 2016. Aeropostale, a U.S. clothing IRAN. MALL DEVELOPERS ARE OPTIMISTIC retailer for children and teenagers, signed a licensing agreement with “Q&A Retail Com- ping mall is a key challenge”, said Allan pany” to launch in Egypt. The agreement Kellenberger from the Swiss property fi rm includes 10 independent stores by 2020 Elocations. in Egypt. Q&A Retail Company is owned by Quattro Trading Company, which operates franchising deals in the furniture and high- Intellectual property is another major chal- end fashion sectors. Quattro is actively look- lenge in Iran. In November 2015, an “illegiti- ing to add food and beverage retailers to mate” KFC fast food outlet opened in Tehran their portfolio. (Iran), but no franchise rights have been granted to any party in Iran. It was closed the Go Sport signs 3 master-franchising deals. In November 2015, the The capital city of Tehran garners 20 million inhabitants next day. Zara and Massimo Dutti have also sporting goods retailer opened a 3,200 sq.m been victims of counterfeiting. “Some people GLA fl agship in Dubai’s Mall of the Emirates During the Mapic event, the Iranian devel- go to Dubai, buy an array of merchandise (U.A.E.) in partnership with Al Mana Fashion oper IMCC said it had already leased 50% from those brands and resell them in Iran”, Group. The store has a “gait analysis” service of the future Iran Mall in Tehran (net rent- said a specialist. which helps customers choose shoes, a vir- able area of 255,000 sq.m, opening in H1 tual “home trainer” if selecting a trail bike and a 10 meter climbing wall. In October, Go 2017). Carrefour will occupy 20,000 sq.m With an educated and sophisticated pop- Sport opened a 800-sq.m GLA store in Abi- with a hypermarket and Lebanese fi rm Aza- ulation of 80 million (60% is under age djan (Ivory Coast), located in Cap Sud Mall dea has expressed interest as well. 35), interest in retailers keeps ris- and run by Mercure International of Monaco. Azadea is a distributor of 55 ing. Foreign sanctions against Another unit opened in Baku (Azerbaijan), global brands in the Middle Iran could be lifted before covering 950 sq.m GLA and is operated by East such as Superdry, Cal- the beginning of 2016 Blue Planet. zedonia and Eataly. “With and many Iranians Sephora beauty Steinhoff moves into home elec- 600 stores and 20,000 want to buy foreign retailer (LVMH) tronics retail. The South African com- parking spaces, Iran Mall brands without having will launch in Iran pany, previously specializing in discount will be the fi rst shopping to fl y to Dubai. Iran’s non-food retail with Conforama (furniture) center of this scale in in 2016 G.D.P. should grow by and Pepkor (clothing and home furnishings), Iran”, said a spokesman. 3% this year while infl a- plans to buy the home electronics retailer Ex- “Food and beverage will tion should “slow” to 15%, treme Digital. Based in Hungary, Extreme Dig- ital posted sales of US$80 million in 2014. In cover 10% of the area.” It is down from a 45% increase early 2015, Steinhoff invested US$5.7 billion part of a mixed-use complex, which two years ago. Iran’s fashion mar- to take over Pepkor, already well established includes a skating rink, a 14-screen theater ket (clothing and footwear) jumped by in Poland and Australia. With its low priced and 2 hotels. IMCC is also building two oth- 51% in 2014 to US$8.1 billion. The beauty offerings, Steinhoff continues expanding into er malls in Tehran: the high-end Farmanieh market grew by 29% to US$3.5 billion. The countries with an emerging middle class like Mall (70,416 sq.m GLA, opening in 2018) in high-end watch market is also seeing fair Hungary, as most revenue is earned in Eu- rope. the wealthy northern suburb and the Mirral growth, with Omega and Zenith already Mall (17,000 sq.m GLA, opening in 2019), selling in the country. For Mr.Kellenberg- Massmart launches a D.I.Y store which will target the middle class. A 3rd mall er, “Luxury goods that are accepted by in Zambia. The D.I.Y chain of Builders is being developed (130,000 sq.m GLA) in conservative Muslims are luxury watch- Warehouse, owned by Massmart, opened a Mashhad, Iran’s second most populated city. es, which are mostly worn by men.” Since Zambian store of 4,665 sq.m (plus an exter- opening in Iran in 2006, Benetton runs 24 nal yard of 6,393 sq.m) in November. Locat- In terms of retail property, Teheran has no stores and Salvatore Ferragamo is active ed at the East Park Shopping Mall in Lusaka, it created 156 jobs. It is the 39th Builders luxury high streets, only 65 shopping malls. via an agreement with the multi-brand Warehouse store overall and the 6th outside “Many malls have illegal permits and 300 retailer Alijenab. Carrefour runs 3 HyperStar South Africa. malls are now under construction in Iran. hypermarkets and 2 supermarkets. LVMH will Making sure that you enter the right shop- open a Sephora store in Iran in 2016.

ASIA’S EMERGING RETAIL MARKETS Asics leads the athletic shoe race. During the 9 months ending in September 2015, sales of Asics reached US$2.7 billion, with 76% coming from outside of Japan. The Forecasted metropolitan retail sales in Asian megacities (in US$ billion, 2015 forecast) (Source: Planet Retail) footwear manufacturer continues expanding into retail, with 414 independent stores under the banners Asics, Onitsuka Tiger and Seoul 169.0 Asics Tiger. Asics Tiger gives new life to icon- Guangzhou-Foshan 103.3 ic running shoes of the 1990s (like Gel-Lyte III) and is particularly appealing to younger Shanghai 98.2 customers. Asics opened a ﬂ agship in Ma- Chongqing 80.2 drid in February 2015 and launched a new “performance concept store” in France in Beijing 74.2 July 2015. In Europe, sales at its standalone Dhaka 19.1 stores increased by 26%.

Bangalore 16.5 The U.S. hamburger chain Shake Shack enters Japan. Shake Shack 0 20 40 60 80 100 120 140 160 180 hamburger restaurant opened its 1st Japa- nese unit in Tokyo’s Icho Namiki Avenue (Mei- ji-Jingu Gaien Park). Created in 2004 in New THAILAND. IKEA OPENS A PICK UP STORE York, Shake Shack is the forerunner of next generation burger restaurants, a long way days. Thanks to Ikea Phuket “pick-up store”, from the fast food restaurants of the 1990’s. sales of the Bangkok store should increase It uses natural and fresh ingredients, meat without added hormones and a modern de- by 10%. Eager to expand the Thai presence, sign. In February 2015, Shake Shack was list- nd Ikea started construction on a 2 store in ed on Wall Street in a US$1.6 billion I.P.O. In Bangkok near the Central Plaza Westgate November 2015, it operated 80 restaurants. mall. Another site is planned in Northern Bangkok, near the recently expanded Future Hong Kong. No rent increase in Park Rangsit Mall. Ikea is also seeking local 2016. According to CBRE, “Prime high street The world’s largest home furniture retailer partners in the Philippines (Manila) and rents in Hong Kong, serving 7 million people, fell by 16% in the 9 months of 2015. The Ikea opened its ﬁ rst “pick-up and order Vietnam (Ho Chi Minh City). restrictive policy for Chinese shopping tours th point” in Asia on November 27 . Located has reduced critical tourist spending. Rents at the Phuket resort (Thailand), this store To avoid expensive delivery costs for should end the year down by 20%, and con- covers 2,615 sq.m with 15 parking spaces large-volume furniture, Ikea has rolled out tinue to fall by up to 15% through 2016. The and represents an investment of about pickup points for online orders. It opened its impact has been more apparent on high €4.5 million. Previously, Phuket customers 1st pilot in March 2015 in Spain, followed by streets where rents fell the most”, said CBRE, while the effect on malls has been relatively had to pay for delivery from the only store a similar unit in the United Arab Emirates limited. “The decline in tourist spending is in Thailand, more than 800 km away via during the summer (2,500 sq.m in the city of fundamental and will not be reversed in the Bangna’s International Airport. Customers Al Ain) run by Al Futtaim Group. Another unit near future”. Athletic and fashion mid-market can order the full Ikea line apart from plants, is expected in Canada shortly. brands are gradually replacing luxury brands and collect from the pickup point within 5 as tenants in core tier-one sites.

Costco sells online in South Ko- ALIBABA’S PROMOTIONAL SALES JUMP BY 60% rea. In November, the U.S. retailer Costco Wholesale (turnover of US$113.7 billion in On November 11th, during Alibaba’s clients are and how to reach them online”. 2014) started selling online in South Korea, a Singles Days shopping festival, sales of In February 2016, Alibaba will launch a se- fi rst for Asia. Only clients with a membership Tmall.com and Taobao.com jumped by cond promotion before the Chinese New card can buy on the website, which does 60% to US$14.3 billion in China (gross Year. not include fresh products. All prices include merchandise value), with 68% of orders delivery. In South Korea, a country with de- manding clients, Costco ranks 1st in terms of made via mobile phone. The categories Meanwhile, Alibaba continues expansion customer satisfaction ahead of the 4 large of fashion (Uniqlo, Nike, Adidas), beauty into the retail sector. In March 2015, the hypermarket chains (E-Mart, Homeplus, Lotte (Lancôme and L’Oreal) and baby products fi rm invested US$692 million in partnership Mart and NH Hanaro Mart), according to the were the best sellers in China, boosted with Intime Chinese department stores. Local Consumer Agency. by big discounts. International brands ac- In August 2015, the business invested counted for 33% of Alibaba’s sales on that US$4.5 billion to purchase 19.9% of Su- Apple Pay to launch in China in February 2016. In China, Apple has day. ning, the Chinese home-electronics retai- signed an agreement with 4 major banks to “This is not a profi table event, but it defi - ler. Alibaba aims to strengthen the logistics launch its payment system Apple Pay, which nitely helps us build brand awareness in network required in China for cost-effective works with an Iphone and a fi ngerprint. U.S. China” said Jeroen de Groot, Executive delivery to Internet customers over very consumers have not adopted Apple Pay, as at Metro Cash & Carry. “This is a good long distances. they still prefer credit cards. investment because we learn who our

OUTLET CENTERS. MATURITY IN THE WEST, EXPANSION IN THE EAST Outlet centers, as a liquidation channel, are resistant to crisis. Although Western Europe shows the most proﬁ table outlet malls, Eastern Europe has the lion’s share of expansion projects.

Tokyo are selling visits to London, including In Moscow, Russia, Belaya Dacha Outlet is tours to Bicester Village. ranked 20th (Hines, 14,015 sq.m). “Outlet sales are literally fl ying today in Russia”, said In Germany, “All Outlet Centers perform sig- Brendon O’Reilly, C.E.O. of Fashion House. It nifi cantly above the European average, said is exactly the same situation as in Poland af- Caroline Lamy, Director of Magdus. The pref- ter the 2009 crisis”. In Moscow, the Fashion erence of global retailers for German loca- House Outlet mall will post like-for-like sales tions is unmistakable.” 56% of the retailers up by 30% in 2015 (in rubles). A 4,500-sq.m polled plan to open outlet stores in Germany expansion (€11 million investment) is under- in the next 12 months, with 46% interest- way to add 30 stores before November 2016. Caroline Lamy ed in France and 27% in the U.K. South of “Outlet centers are a liquidation channel, not According to a study from Ecostra and Mag- Stuttgart, the top ranked outlet center of Out- a retail channel, and they are resistant to cri- dus conducted among 90 outlet retailers, letcity Metzingen is the highest performing sis, added Mr. O’Reilly. Russians are traveling new outlet openings have slowed in Europe. German unit (operator is Holy AG, former less and they want to buy discounted West- For 2 years, the majority of new sq.m came owner of Hugo Boss). Still in Germany, Zwei- ern brands by up to 70%.” Fashion House is from extensions of existing assets. The tight brücken (Neinver), Ingolstadt Village (Value investing €70 million to build another unit in funding environment and the lack of confi - Retail), Ochtum Park Outlet, Designer Outlet St. Petersburg (120 stores, 20,260 sq.m GLA dence of some investors for outlets, seen as Berlin and Wertheim Village are all ranked in with 31% already leased). out-of-town and lower value sites, created a the “Top 20” . In 2015 the local Competition negative context for development. Authority ordered Value Retail to remove so- Romania, Bulgaria, Croatia, Serbia and Outlet malls are still profi table for tenants. called “radius” clauses from leases, which Slovak Republic have 1 outlet center and In 2014, the home appliance stores Home prevented retailers from opening new outlet the Czech Republic has 2 (Prague and & Cook Outlet (Seb Group) posted average stores within a radius of 150 km of existing Znomjo). According to the International Out- sales of €7,000/ sq.m a year. Top stores units. let Journal, the Peakside investor is looking reached €15,000/ sq.m. “When our store for opportunities in the Czech Republic, is placed exactly where we want it within Eastern Europe, which saw no outlet activity Austria and Hungary, with Ukraine as a pos- the mall, turnover per sq.m can be 200% before 2002, remains largely unsaturated sible focus. In early 2014, the Kiev E95 Out- more than the mall average”, said Geraud and could be the next destination for inves- let project of 35,500 sq.m was suspended d’Adhemar, Retail Director at Group Seb. In tors, once political stability is proven. Poland due to political turmoil (developer Evo Land 2015, 59% of the retailers said their outlet is a major exception with 10 outlet centers Co.). The Darynok Trade Centre announced a stores were more profi table than their stan- (5 are run by Neinver). The Fashion House 5,000-sq.m project in Kiev. In Kazakhstan, a dard stores. Retailers plan to open 3.2 outlet property developer (Liebrecht & Wood) runs US$100 million outlet center may open in stores in the next 12 months, down from 4.6 outlet malls of 22,000 sq.m GLA on average Amalty or Astana. In Belarus, a 30,000-sq.m one year ago. in Russia, Poland and Romania . These were unit is planned in Globus Park (Minsk) with built in 3 phases to serve a catchment area the country’s President as an investor. Based on the ratio of turnover versus site of 2.5 million people. costs, the study also revealed a ranking of The 10 best outlet centers in Europe in 2015 Europe’s “Top 20” outlet malls. This year, 95% (Sources : Ecostra / Magdus 2015) of Europe’s best outlet centers were in West- Rank Average Outlet Centre Country Operator ern countries. Close to the German border, 2014 grade * the Dutch Roermond Outlet is the most prof- 1 Roermond Netherlands McArthur Glen 1.32 itable and also one of the largest at 35,000 Bicester Village Outlet 2 U.K. Value Retail 1.40 sq.m, whereas the average is 20,000 sq.m. Shopping Another 15,000 sq.m is planned for 2017. 3 Outletcity Metzingen Germany Holy AG 1.57 Outlet Roermond attracts 5 million visitors 4 La Vallée Village, Paris France Value Retail 1.67 a year and Germans account for 55%. Its operator is McArthur Glen, Europe’s largest 5 London Designer Outlet U.K. Realm 1.80 outlet operator (turnover of €2.8 billion in 6 Ellesme Port Cheshire Oaks U.K. McArthur Glen 1.85 2014). 7 Serravalle Scrivia Italy McArthur Glen 1.86 8 Portsmouth Gunwharf Quays U.K. Land Securities 1.88 The U.K. site at Bicester Village near Oxford 9 Parndorf Austria McArthur Glen 1.93 nd (Value Retail) is the 2 most profi table in Eu- Zweibrücken, The Style 10 Germany Neinver 1.98 rope, boosted by a large number of foreign Outlets tourists. Japanese travel agencies based in * 1 = maximum score / 5 = minimum score

RETAIL RENTS. WHICH ARE THE MOST EXPENSIVE STREETS IN THE WORLD?

In 2015, rental values remained surprisingly steady, driven by strong demand from global retailers and poor supply of available locations in the most popular streets.

Cushman & Wakefi eld released its 27th na). In Ireland, rents at Grafton Street (Dub- 14%), as Chinese demand for high-end annual survey of retail rents among 500 lin) jumped by 28%, the largest increase goods dropped. Hong Kong was particularly international shopping streets. This shows alongside Covent Garden, London. affected due to the corruption clampdown that rental values increased by 0.7% in the since 2012. Rents at Causeway Bay already year to June 2015, slowing down from the In Turkey, Bagdat Caddesi in Istanbul was dropped 7% in 2014. Many tenants have re- 2% increase of 2014. Rents grew by 35% the most expensive street at €3,016/sq.m. negotiated leases and reduced retail space on the streets surveyed despite the slower The highest rental growth rates were in Is- to increase store profi tability. In November global G.D.P. growth expected at 2.5% this tanbul on Caddesi (up 24%), Istiklal Street 2015, British high-end retailer Burberry said year, the stock market crash in China during (up 27%) and Abdi Ipecki (up 21%). The that it could downsize its Hong Kong unit. the summer of 2015, political tensions in the Nisantasi district continued to attract luxury Louis Vuitton has strongly denied rumors Gulf, the 50% fall in oil prices (to US$50 in fashion retailers like Zadig & Voltaire, Armani that it would close 20% of its Chinese stores. mid-2015) and increased terrorist threats. and the Swiss watch maker Ulysse Nardin. It said that the Chinese network would re- Demand remained healthy, as Kiko Milano main steady in 2016, with plans to refurbish New York’s 5 th Avenue (between 49th and 60th and Under Armour entered Turkey with some units. Despite India’s opposition to streets) is the most expensive retail location Dogus Holding. Legoland secured foreign investment in multi-brand in the world. Strong tourist fl ow to Manhattan 3,000 sq.m in Forum Istanbul. retail, retail rents increased by helped keep this high position, with foreign Quick hamburger restau- 13% in Connaught Place visitors attracted to the vibrant high streets rants opened 4 stores in At Causeway Bay, (Delhi), by 15% in Anna nd dominated by luxury retailers. Rents across Istanbul and Crate & Bar- Hong Kong, retail Nagar 2 Avenue (Chen- the U.S. grew by 7% year-over-year, with rel added a 4th store in nai) and by 15% in DFL rents decreased by peaks in Los Angeles (up 23% on Rodeo Ankara Next Level. Galleria (Gurgaon). In Drive) and San Francisco (up 13% in Union 14% in 2015, after a Tokyo (Japan), rents Square). In Argentina, Florida Street (Bue- As the confl ict between 7% drop in 2014 jumped by 20% in Omo- nos Aires) was the most expensive street in Russia and Ukraine has tesando to €7,987/sq.m. Latin America (€1,206 /sq.m/year). “North continued, with strong cur- Many luxury retailers have America should sustain a positive trajectory rency devaluation, rental values fl ocked to Japan this year, like going forward in 2016, bolstered by a steady fell sharply in Ukraine (down 36% on Burberry, Moncler, and Brunello Cuci- consumer sector benefi ting from a reduction Khreschatyk in Kiev) and even more in Rus- nelli, along with food and beverage brands in energy costs and stable employment ex- sia, with a 44% decrease on Tverskaya in such as Shake Shack burgers, Dominique pectations, especially in the U.S.,” said Gene Moscow and a 60% decrease on Nevsky in Ansel Bakery and Guzman y Gomez Mex- Spiegelman, Head of Retail in North America. St. Petersburg. ican food. Manila (Philippines), Australia and New Zealand have attracted a growing In Europe, the Champs Elysées (Paris, In Asia Pacifi c, retail rents declined sharp- number of international retailers this year. France) is the world’s 2nd most expensive ly in Causeway Bay, Hong Kong (down shopping street, as 2015 saw the arrival of high-end retailers (Longchamp fl agship store, Dubail’s luxury watches). “Paris retail The 10 most expensive shopping streets in each country (Source: Cushman & Wakefi eld, November 2015) dynamics may be affected by the terrorist th %change attacks of November 13 ”, said the study. Rank Rank €/ sq.m/ Street City, Country (local 2015 2014 year* In 2015, London (U.K.) should attract 18.8 currency) million visitors and become the most visit- 1 1 Upper Fifth Avenue New York, USA 33,812 + 4 % ed city in the world. In many E.U. capitals, 2 2 Causeway Bay Hong Kong 23,178 -14 % rents have jumped due to the shortage of high-end locations and strong demand from 3 3 Champs Elysées Paris, France 13,255 + 0 % global retailers such as Rituals, Harmont & 4 4 New Bond Street London, U.K. 12,762 + 12 % Blaine, Coach, J. Crew, Arc’Teryx, New Bal- ance and Kikki-K, which want to reach the 5 6 Via Montenapoleone Milan, Italy 10,000 + 25 % E.U. population of 506 million inhabitants. 6 8 Bahnhofstrasse Zurich, Switzerland 8,643 + 0 % In Rome, retail rents at Via Condotti’s best 7 5 Ginza Tokyo, Japan 8,520 + 3 % locations jumped by 27% in 2015. Rent- 8 7 Myeongdong Seoul, South Korea 8,519 + 0 % al values on the best streets in Spain and 9 9 Kohlmarkt Vienne, Austria 4,620 + 4 % Portugal increased (up 6% on Avenida de 10 11 Kaufi nger/Neuhauser Munich, Germany 4,440 + 1 % Liberdade, up 10% on Gran Vía in Madrid, up 12% on Rambla de Catalunya in Barcelo- *Data ending in June, 30, 2015. Ranking only includes the most expansive street in each country.

A NEW BOSS INDIA. FROM January 17-20, 2016 NRF Big Show AT AUCHAN RETAIL BENETTON TO JABONG Javits Convention Center, New York, USA How do you build a brand that young peo- st Newly created Auchan For the 1 time in Indian ple desire? Who are the global leading-edge Holding has been com- e-commerce, a C.E.O. retailers? How do you match the pace of pletely reorganized into from a traditional retai- change with an agile retail proposal? These three independent com- ler is heading an online are topics to be discussed during this event, panies: Auchan Retail venture. While losing with over 33,000 participants including: (sales of €51.2 billion market share to Myntra • Terry J. Lundgren, C.E.O., Macy’s in 2014, including 35% and Shopclues (funded • Kevin A. Plank, C.E.O., Under Armour by Tiger Global investor), • Matthew Shay, President and C.E.O., Na- Wilhelm Hubner in France), Immochan Sanjeev Mohanty (sales of €635 million) the online fashion we- tional Retail Federation and Oney Bank (€383 bsite “Jabong” poached Sanjeev Mohanty, • Neil Stern, Partner, Ebeltoft USA, McMillan Doolittle million). former C.E.O. of Benetton. Based in Gurgaon, he is C.E.O. and M.D. of Jabong beginning in • John White, Chief Operating Offi cer, Fossil Wilhelm Hubner (aged 52) is the new Ma- early December. The German group Rocket www.bigshow16.nrf.com naging Director of Auchan Retail since Internet owns 22% of Jabong and could sell mid-November. A qualifi ed engineer, he is in its stake shortly. March 8-11, 2016 charge of Auchan’s global retail business in Mohanty previously worked at Arvind Lifestyle, Foodex Japan Makuhari Messe, Chiba, Japan 16 countries, covering hypermarkets, super- Levis Strauss and Madura Garments. He Foodex will take place in Tokyo for the 41st markets, convenience stores, drive-through spent 11 years at Benetton-India, growing Be- netton’s store network from 19 to more than consecutive year from March 8 to 11, gather- and e-commerce. He was previously Head of ing food retailers and manufacturers around 800 stores, and a footprint from 9 to 150 In- Auchan-Russia. food innovation topics. Foodex reported over dian cities. He was also managing Benetton’s 77,000 participants in 2014. Hubner has worked his entire career at Au- business in Pakistan, Nepal and Sri Lanka. www.jma.or.jp chan. He started in 1987 as a Department Last year, sales of Benetton-India reached Manager, and later he held various positions US$300 million. This fashion retail expert is at Auchan-France, including Director of Veli- also involved with humanitarian causes. March 9-14, 2016 zy’s huge hypermarket (France’s largest with Japan’s Retail Trip sales of €282 million in 2014) and C.O.O. Tokyo, Japan for the Paris region. Joining Auchan-Russia BIRCHBOX EXPANDS In parallel with Foodex in Japan, a retail business tour organized by Missions MMM is in 2010, he managed the hypermarket bu- AWAY FROM THE WEB delving deep into Japan’s fascinating retail siness, and the Russian subsidiary. Hubner market. Tokyo is a retail laboratory with a very has a practical leadership style and is des- Online retailer Birchbox high level of services, products exclusively cribed as a “go-getter” who is able to make (US$125 million sales sold for the domestic market and solutions decisions quickly. in 2014), which sells for an aging population. subscriptions to a beauty www.missions-mmm.com box, has recruited 4 well- known managers to roll out physical expansion March 20-23, 2016 GLOBAL RETAIL NEWS in 2016. Franchise Expo Paris Philippe Pinatel Porte de Versailles Exhibition Center, Paris, France A monthly publication (11 issues per year) edited by Beauty expert Philippe Pinatel is appointed Global Retail News, SARL with a capital of €20,000 This 4 day summit is a networking opportu- as Chief Operations Offi cer. As a graduate of nity for entrepreneurs who are eager to start Publisher: C.Ducrocq London Business School, Pinatel started at Chief Editor: S.Baqué businesses alongside global retailers. More Clarins in 1998. He joined Guerlain one year Editorial Secretary : Ewan Ward-Thomas than 460 international chains are expected E-mail : sophieb@globalretailnews. com later, running the Chinese and Korean bu- at the event, with an array of master franchi- sinesses, ending as Managing Director. Since Address: see and franchisers. The show reported over Global Retail News 2010, he moved to retail, entering Sephora 35,000 visitors in 2014. 52 rue Montmartre in North America in charge of the Canadian www.franchiseparis.com 75002 Paris France market. Benjamin Fay is newly appointed Tel: (+33) 618 33 77 03 as Vice President of retail development and April 12-14, 2016 customer experience. After 8 years at Apple Annual subscription (Tax excl.) World Retail Congress (retail development team), Fay’s mission will E-mail, 1 reader: 549 € Madinat Jumeirah, Dubai, U.A.E. be to translate Birchbox’s D.N.A. into a store Paper + E-mail, 1 reader: 649 € In partnership with Majid Al Futtaim, this fo- Simple licence, 2 to 5 readers: 1,199 € concept and design. Andrew Lande-Shannon rum gathers more than 1,000 retail execu- Unlimited licence: From 2,399 € joins Birchbox as Design Director, in charge tives including: ISSN: 2104-7960 • SIRET: 502 405 996 00021 of in-store merchandising. He previously • Jean-Christophe Babin, C.E.O., Bvlgari CPPAP : 0317W92648 worked in creative roles at Prada, Theory • Alberto Baldan, C.E.O., La Rinascente and Abercrombie & Fitch. Finally, Douglas • Andy Clarke, C.E.O., Asda Wal-Mart Simpson (ex-Banana Republic and Bed Bath • JC James Curleigh, President, The Levi’s & Beyond) is appointed Vice President of Re- Brand tail. He also worked 7 years at Juicy Couture, www.worldretailcongress.com where he opened 60 stores.