Sunday, September 25

Premium outlets a growingly popular concept in Malaysia


KUCHING: The premium outlet concept is growing popular in Malaysia due to the increasing demand for retailers to put off-season merchandise in a separate channel.

According to AmResearch Sdn Bhd (AmResearch), the premium outlets provides a secondary platform for retailers to have better inventory management (by re-channeling products) and lower operating costs as well as to create brand awareness.

The research house gathered from its channel checks that premium outlets’ rentals are typically 40 per cent to 70 per cent lower.

Thus far, there is only one premium outlet in Malaysia like the Johor Premium Outlet (JPO), which is a joint venture between Genting Plantations and Premium Outlets. It has seen much success since opening in 2011.

Resembling JPO, several other premium outlet openings are in the pipeline. In Greater KL alone, there are Genting Premium Outlets by Genting Malaysia Bhd, Mitsui Outlet Park KLIA by Japan-based Mitsui Fudosan and MAHB, KL International Outlet (KLIO) by Mainstay Holdings Bhd and US-based Horizon Group.

Up north in Penang, PE Land Sdn Bhd will be developing Penang Designer Village at Batu Kawan. In Malacca, Freeport A’Famosa Outlet Village will be opening in Alor Gajah, which is a joint venture between A’Famosa Group and UK-based Freeport Retail.

The addition of another five is rather significant, but these outlets would be serving different region.

“However, we think that it is possible for outlet malls to perform better than full-price outlet stores in terms of same-store-sales growth (SSSG) due to attractive pricing and tourism.

“In the current environment, retailers are already facing weak consumer sentiments and rising operating expense. We believe that cannibalisation is unlikely to happen.

“Premium outlets are generally located far from fullprice outlet stores and serve a different range of products,” said AmResearch.

“We reckon that KLIO will be the most exciting premium outlet given its positioning as a value and luxuryoriented shopping outlet and its close proximity to the Kuala Lumpur city. KLIO is targeted to open on July 1, 2016, with construction starting this September. It will have a retail floor space of 400,000 square foot.”