Analysis: Why upsizing fashion flagships is on-trend

21st March 2018

As many sectors explore smaller store formats, fashion retailers are busy upsizing, reports Peter Crush

Next at Intu Metrocentre

Somebody clearly isn’t getting the memo. At a time when some of the most popular retailers are downsizing, and developing small format shops (IKEA and Dyson are all now investing in small-sized units) –fashion retailers seem to be doing just the opposite – especially in shopping centre stores.

Primark will open its new Bluewater store next year with a massive 4,274 sq m (46,000 sq ft) of retail space, while retailers with existing stores in major centres are busy upsizing themselves too.

These include Next, which recently doubled – to 7,246 sq m (78,000 sq ft) - its presence at Intu Metrocentre in Gateshead, and River Island, which has just opened an upsized store at Centre:MK in Milton Keynes. These brands join Fat Face and The White Company, which both doubled their stores sizes at Bluewater in 2016 and 2017 respectively, while later this year Primark will open a larger store at Intu Merry Hill.

Fatface at Bluewater

“For a while brands were playing catch-up in their interaction with customers, but this trend – and it’s one that will continue – is about them saying ‘we’ve caught up, now come to us because we are a destination’,” argues Michael Sheridan, CEO of global retail design agency, Sheridan & Company.

At Intu, regional managing director Colin Finn says: “The trend is definitely for retailers to showcase their whole product range. Zara recently opened a 32,000 st ft store at Intu Trafford Centre, while we’re also welcoming brands like Tesla, Seat and Silent Night who are moving from big box retail units to flagship stores within our centres.”

Although some argue the rise of the superstores is linked more to short-lived expediency – retailers grabbing the chance to snap up space left by big brands disappearing (Next Gateshead has reconfigured an old BHS, while Primark will expand into one of these at intu Merry Hill later this year), those in the know sense something different. “While opportunism exists, it’s ‘experience’ that’s the driver,” argues Sarah Mogford, senior associate at Lewis Silkin, specialising in retail real estate. Adds Finn: “While the availability of vacant space does provide fantastic opportunities to create new spaces and entice new brands into centres, we’re seeing a real drive from some the UK’s biggest and best retailers to deliver more experience-led stores which means these flagships would have happened anyway.”

Intu Metrocentre

According to Hugh Seaborn, CEO of Cadogan Estate (which controls 93-acres of prime retail space in Chelsea and Knightsbridge), a flagship allows a store to impress and be a real draw: “Shoppers are increasingly expecting an inspiring experience that justifies time investment made to visit the store and larger spaces provide brands with more freedom to create more dynamic, bespoke experiential events and product launches.”  But, can stores risk getting too large, and actually endanger the very consumer experience they want to create?

“I’m still of the view there’s nothing wrong with having a space that people need to visit twice to see everything,” argues Sheridan, who adds “Not seeing everything creates repeat visits, while logically, the larger stores are, the longer people stay, the more they are likely to spend.” He sees brands as having two choices – either they use the extra room to give products “space to breath” or they “create ‘selfie’ areas, food spaces and other areas of interest.”

However, others argue brands still need to be mindful of striking the right balance: “Theatre is great, but they can’t forget product,” says Richard Willis VP, innovation and growth at retail technology company Aptos. “Some are suggesting these larger stores play more of a branding role, for people to see stuff in the flesh, and then buy online later, but that makes ROI hard to measure. Flagships still need to generate sales.”

In his estate, Seaborn spots a trend for retailers – such as Hermes, Fendi and Versace to favour more of a ‘gallery’ design. “These spaces offer more of a blank canvas for luxury brands to put their own stamp on the design and ultimately be more creative with their experiential activity,” he says.

And the fact is landlords aren’t simply giving away enlarged space either. “Entry deals might be a bit cheaper, but longer term, it’s the same,” argues Sheridan about property costs. “Landlords are being more exacting about what a retailers’ proposition is and how a balance of larger and smaller stores is to be maintained still.”

But while flagship stores certainly seem like they’re here to stay, it’s also worth noting too that ‘flagship’ doesn’t necessarily mean big. “River Island’s ‘flagship’ in Milton Keynes is only 1,858 sq m (20,000 sq ft) but for the local area it’s big” says Mogford.

Finn describes this with the oft-used term ‘rightsizing’, adding: “A successful store, no matter how big or small, has to start with understanding the customer journey.”

Says Mogford: “In this sense flagship is also about location – retailers looking harder for where top spots are, as they look more to rationalise stores in fewer key regions. What’s clear though, is flagship is something we’ll be seeing much more of.”