Hunting for bargains

Facade of Acienda Designer Outlet, which is expected to welcome shoppers in August this year.

Everyone loves a bargain and Londoner Chris Milliken is no exception.

Milliken was 25 years old when he bought at a Burberry outlet store a classic Burberry trench coat that originally cost $1,000 for just $200. Just three weeks later, he found himself outside the flagship Burberry store in London.

“I would normally have walked past, but pleased to be now part of the Burberry brand, in I went and bought a Burberry shirt at full price to go with the coat. They have had a loyal customer ever since,” Milliken said.

The purchase also planted in him the idea of building a business around providing more shoppers the pleasant and cash-saving experience of getting a real bargain through outlet stores.

It is an experience that Milliken, who went on to establish the Pall Mall, London-based Freeport Retail Ltd., wants to provide Filipinos with the opening in August of the Acienda Designer Outlet in the Silang-Tagaytay City growth corridor in partnership with real estate developer Cathay Land Inc.

While malls have mushroomed all over the country, with a number of analysts even saying that the Philippines has too many, Milliken believes that there is room in the market for an outlet store, one that is more similar to the bargain centers all over the United States, Europe, and recently, in Southeast Asia.

Artist’s rendition of the French-style windmill—Acienda Designer Outlet’s focal point

The 56-year-old Milliken told the Inquirer in an interview that he first came to the Philippines four years ago as part of Freeport Retail’s thrust to explore expansion opportunities in fast-growing Southeast Asia. He looked at the retail landscape here and saw that the Philippines does not have a “pure” outlet store.

What the Philippines has right now, said Milliken, are “hybrid” outlet stores that mix under one roof full price and off price stores, when the international standards require just off-price stores of top local and international brands so that buyers who will make the normally one and a half hour trip will definitely go home with items bought at a deep discount, averaging at 40 percent.

“The Philippines has a number of outlet clusters but has no pure dedicated outlet center in a high quality environment. Acienda Designer Outlet will fill that gap and create a regional destination for tourists and bargain hunting domestic shoppers alike,” said Milliken, a 30-year veteran of the retail and leisure development sectors.

“The aim of any good outlet is to create an experience for the customer that allows them to spend a half or even a full day bargain hunting in an interesting and high quality retail and leisure space. Experience shows that customers are happy to travel long distances to enjoy a day out at an outlet as they are assured that they are certain to find a bargain and have a fun time,” he added.

Outlet stores serve an important purpose to brands, he said, as these allow them to dispose of excess inventory without affecting the brand image or price structure of the full price stores.

He shared that factory outlets originated in the United States in the 1960s and the format has since expanded and developed to become one of the key retail channels used by brands and retailers. The past decade has seen an explosion in outlet development and the integrated outlets worldwide sell over 5,000 brands.

“Retailers see outlets as an important means not only of selling excess stock but also in attracting new customers to their brands,” he said.

“Every brand distributor has stock either they have not sold, overmanufactured, overordered—and what do they do with the stuff? They can put it on sale in their stores, but you are kind of devaluing the brand. Clearing your stock in the normal store is not particularly clever, so the idea is to sell them elsewhere, through an outlet store, while giving the buyers a branded experience,” said Milliken, whose Freeport started building outlets in the United Kingdom in 1992.

There are an estimated 400 outlet stores in the world, with the US having about 150, 35 in the United Kingdom and 25 each in France and Italy. In the region, there are about seven in Thailand, five in Malaysia and one in Singapore. And the timing is ideal for the Philippines to be added to the list of countries with an outlet store, Milliken said.

Milliken

“Markets need to have some maturity to be able to host a real outlet store. There needs to be enough brands in the market, large enough to have excess stock in the market,” said Milliken, whose Freeport is reputedly one of the largest operators, with a presence in continental Europe and Southeast Asia and with plans to expand soon to the Middle East.

He believes the Philippines has reached that point—thus the investment in the Acienda Designer Outlet in Tagaytay, which is just far enough to save on overhead costs but near enough to make it a day trip for buyers from the city who want to check out the 100-plus stores.

Outlet centers are becoming favorable these days as money is tight and consumers want to make wiser buying decisions.

Normally, only 20 percent of those who go to full price stores end up making a purchase. In an outlet store, the number is higher at an average of 90 percent.

Considering that outlet centers are normally about an hour away from urban centers, it is likely that they are already decided on making a purchase. It is now just a question of how much they are willing to buy.

But in the Philippines, Milliken said the merchandise mix would be a bit different as some 30 percent of the space would be allotted for food and beverage stores, compared to around 20 percent elsewhere.

This is indicator of the buying behavior of Filipinos who make shopping a family affair. Thus aside from food and beverage outlets, there will also be a center for children.

The amenities also give people a reason to go out of their mobile phone world. While e-commerce is indeed a growing force, Milliken said there was nothing like the instant gratification of seeing something, trying it on and then going home with a purchase.

“It is also about being different, surprising and fun. We need to give people a wow factor,” said Milliken.

He is confident that with Acienda Designer Outlet, slated to open on Aug. 2, Freeport and Cathay Land will be able to provide just that.