Money Matters

Pen-and-ink + ecoline portrait of Italian designer Giorgio Armani by Graziano Origa.
“Outlet shoppers want to experience luxury”

One may define outlet for what it denotes but where the happy bargain hunters are concerned outlets are those commercial centers where luxury goods are on sale all year round, a place where one could get as much as 80% discount on a designer label winter, spring, summer and fall. In fact, for the shopper it’s the only meaningful meaning of the word.

In the last two years, the outlet sales volume in Spain has increased by 40%. That has to be the 8th wonder of the world considering the threat of a double-dip recession hanging like the proverbial sword of Damocles over the head of the rich and the poor alike.

What may come as equally surprising to the general public is that these outlets are making inroads into the itineraries of Spanish tourists from the provinces as well as foreign tourists especially from Asia, Russia and the nouveaux riches countries in general. A Russian shopper loaded with Dolce & Gabana jeans said she and her husband who was waiting on a bench outside the shop in the Las Rozas Village outlet center would simply have to buy another suitcase.

“They want to experience luxury,” says Michael Goldenberg, CEO of Value Retail Spain, China branch.

The concept of outlet shopping broke onto the Spanish scene in 1996 in the form of the Factory commercial center in Las Rozas, an affluent suburb of Madrid. Fifteen years later the Factory chain has four outlet centers to its name, three in the Madrid region and one in Seville. Twelve million people have been to the Factory outlets in 2010, the year to which the latest available figures pertain, and sales increased by 6% relative to 2009.

Neinver building in the Parque Empresarial Arroyo de la Vega, La Moraleja, Alcobendas, Madrid

Factory has several outlet centers in Europe which are managed by Neinver, a real estate group operating in Spain, Italy, Portugal and Poland. When Neinver created the Factory brand in Spain, it introduced a new form of shopping. Neinver, which acquires leftover stock from previous seasons straight from the manufacturers, claims that it is the only outlet center that guarantees a minimum discount of 30% with respect to the prevailing market price of the items it sells.

A year immediately after its opening, Factory Madrid Las Rozas was given the AECC (Spanish Association of Shopping Centers) award for the “Best Execution of New Integrated Trade Formulas.” In 2006 the AECC award for “Best Marketing Relaunch of a Shopping Center” went to Factory Sevilla Aeropuerto. In 2007 the Magnus (European Observatoire of Outlet Shopping) award for “Best Implementation of the Outlet Concept” went to Factory Madrid. And in 2008 Factory Madrid San Sebastian de los Reyes received the AECC special mention in the category of “Best Formula of Integrated Business.”

Factory is unquestionably the leader of the outlet sector in Spain and the third most important in Europe. Through its website Factory promises to “continue its commitment to innovation, the cutting edge and sustainable development in the design and construction of its centers” so that its customers can continue enjoying “a unique recreational experience, something more than just a day of shopping.”


Giorgio Armani portrait/origafoundation via Wikimedia Commons, CC BY-SA3.0
Neinver buidling/Zarateman via Wikimedia Commons, PD