Outlets spread and receive millionaire investments – 04/21/2023 – Market

A relatively recent phenomenon in the country, outlets are expanding with new units announced in the interior of São Paulo and the expansion of an already consolidated shopping center.

A business group announced in Ribeirão Preto (313 km from São Paulo) an investment of R$ 300 million in the construction of an outlet, the first in the region. Also pioneering, in northwest São Paulo, will be the Garden outlet, in the tourist resort of Olímpia. Catarina Fashion Outlet, in São Roque, is going to open its third expansion in July, which will double the total number of stores.

This recent movement of businesses of this kind began in June 2009, when the Outlet Premium São Paulo was opened in Itupeva.

Since then, shopping centers such as Catarina, in 2014, and new operations of the Outlet Premium network –São Paulo, Rio, Salvador, Brasília and Fortaleza–, among others, have emerged.

They were inaugurated with big brands, in a movement different from that registered in the 1990s, when businesses of this type even opened in São Paulo, but they did not succeed because they had unknown brands and also because they did not have an adequate location, according to the sector.

Catarina is in its third expansion, which will be delivered in July and will leave the shopping center with 290 stores, the largest in the country. The area will increase from 29,000 square meters to 51,000 and a fourth expansion is already planned, to reach 70,000 meters in two years.

It is the second most relevant shopping center within the JHSF Malls portfolio, which has six units in operation and another three under construction, and brings together three million customers a year, 40% of them from the countryside and the rest from the capital.

“We thought of doing something much more inspired by what is in Europe than in the United States, that is, trying to take our experience, from [shopping] Cidade Jardim, from the customer with different brands to an outlet environment. Because of the space it started to have. At no time was it our idea to make a common outlet”, says Walter Borghi, executive director of JHSF Malls and who is in charge of the expansion of Catarina.

According to him, the commercialization policy adopted with storeowners means that the average ticket is four times higher than that of malls in São Paulo, with a conversion rate above 90% – 9 out of 10 who go buy something.

“We doubled sales from 2018 to here in the same stores. There is a whole movement. Of course, with the pandemic, people started to worry more about their health, so there was a boom in sports stores. At the same time, there was a boom too in international stores, due to the greater difficulty of traveling during the pandemic. And even after, it became more difficult to travel due to prices, dollar, euro, anyway.”

The Pereira Alvim group announced on Wednesday (11) the launch of the Santa Maria Outlet, a shopping center on the side of the Anhanguera highway, between Ribeirão Preto and Cravinhos.

It is the first business of its kind in the metropolitan region of Ribeirão, made up of 34 municipalities, and is expected to open by the end of 2024.

Among the factors that motivated the creation of the outlet are the 90,000 vehicles that travel daily on the highway in front of the site, the regional population of 4 million inhabitants, and also the economic vocation of Ribeirão, based on the commerce and services sectors.

“I’ve always seen a commercial enterprise there and I’ve always liked outlets. Always travelling, seeing that this kind of thing works out there. Here it started a little slow and today things took off. Pereira Alvim.

The initial forecast was to launch the business before the Covid-19 pandemic, but the impact caused by the virus on the economy caused the project to be postponed. The works are in progress.

Pereira Alvim stated that the operating cost of a store in a shopping center is three times higher than the same space in an outlet and that this boosts the enterprise’s business.

“A shopkeeper manages to go to an outlet and manages to sell cheaper”, he says. “One that already has the connotation of the outlet selling end of stock, 70% cheaper”, she adds.

Santa Maria will have 37,000 square meters of built area, around 100 stores and 1,800 parking spaces. Among the announced brands are Nike, Adidas, Calvin Klein, Diesel and The North Face. Pereira Alvim said that 50% of the spaces have already been negotiated.

The Garden Outlet project, in Olímpia, was announced in 2017 and should also open to the public next year. It will have more than 100 stores, in addition to a food court and parking for 1,200 vehicles. When launched, the total investment was estimated at R$ 120 million.

The reason for a city of less than 60,000 inhabitants to host a development of this size is the 3.5 million tourists who visited Olímpia last year in search of the thermal waters of the Thermas dos Laranjais and Hot Beach water parks.

The projection is that, in 2026, the total number of tourists will reach 6 million. As the parks are only open during the day, attractions that take advantage of the average stay of tourists in the city have emerged in recent years, such as the Vale dos Dinossauros park and the Wax Museum.

A survey by the Municipality of Olímpia showed that the average stay of tourists in the city –especially from São Paulo– increased from 2 days to the current 3.5 days, which is yet another indication of the need to create attractions for visitors.

The movement of new outlets has also occurred in other states. Data from Abrasce (Brazilian Association of Shopping Centers) show that five shopping centers of this kind were inaugurated in three states (São Paulo, with three, Pernambuco and Paraná, one each) in the last four years.

“The outlet sector has been growing year after year and stands out for offering reduced prices throughout the year. In addition, the arrival of the enterprise promotes a real estate appreciation of 80% and a growth of 67% in jobs”, said the president of the association , Glaucus Humai.

According to Abrasce, the difference between a conventional shopping center and an outlet is that, in the former, visitors are passing through, while the outlet is a destination, where 80% of visitors go with the intention of buying.

“There’s a lot of space, but there’s not that much space. You have to be careful, because an outlet is different. Shopping, if there’s demand, there’s families around, you open it and it usually works. Outlet depends on other things, like brands you are going to bring, what is the discount you are going to give and how much you are going to be able to guarantee that people think it is worth going to him”, said Borghi, from Catarina.