It was a busy year for Quintain in 2023 and the momentum shows no signs of slowing in 2024. Having celebrated the 10th anniversary of London Designer Outlet (LDO) last year and completed the completed the £780m refinancing of its Wembley Park development with JP Morgan and Cheyne Capital, Quintain kicked off 2024 with the disposal of a trio of build-to-rent (BTR) assets Wembley Park to Goldman Sachs Asset Management and Tene Living and the sale of BTR multi-family blocks Alameda and Beton to KKR.
Following media reports in October that it was in talks with US group Ardent to sell the LDO for £90m, a much bigger disposal could yet be on the cards, although Quintain said there was “no active sale process for LDO at present”. Whether it is sold or not, the LDO is expected to have another strong year as it continues to benefit its turnover-based rent approach, which it describes as offering “a life jacket” to its brands.
BE News caught up with Quintain retail director Matt Slade and London Designer Outlet general manager Daniel Tomkinson to find out how the festive sales period went, what the secret of the LDO’s success is and what is in store for the LDO and wider Wembley estate in 2024.
How was trading at the LDO over the Christmas and New Year sales period?
Daniel: Over the Christmas period, we saw incredible sales performances across London Designer Outlet with a number of records beaten for December, as well as year round bests. With help from a record daily sales performance on Boxing Day, achieving £886k, LDO surpassed its previous best ever Christmas week by 13.73%, with £11.2m monthly sales.
With shoppers still navigating cost of living barriers, the industry was cautious around how retail would fare during the festive period, particularly the Boxing Day sales. However, the great brand mix at LDO, including newer additions like Boss and Timberland, blended with clear value for money saw an 11% year-on-year increase in visitors to the outlet.
Matt: After the success of November and Black Friday, I think it’s safe to say that we were cautious, alongside the wider industry, around our expectations of how consumers would shop across the festive season. So, to have recorded our best ever Christmas week, best ever daily sales on Boxing Day and best ever December far exceeded our expectations.
Although we’re in a new year, consumers and businesses will continue to be impacted by the current economic headwinds, so we don’t take these performances for granted and we know we can’t rest on our laurels. However, what the sales performances confirm is the strength in the brand mix we’ve curated at London Designer Outlet and the ability to maximise our position as an outlet that meets the needs, and wants, of increasingly financially conscious shoppers.
What do you attribute the LDO’s success to?
Matt: The LDO hasn’t just played a key role at Wembley Park, it’s also established itself as one of the most valued retail destinations among London shoppers. So, its contribution to 80% of Wembley Park’s turnover, despite only making up 50% of square footage, isn’t all that surprising.
The strategy for the wider retail and leisure offer at Wembley Park is one that complements the strong mix of global brands at the LDO, adding a different dimension to the offer we have here, including a mix of amenities and independent stores, and that furthers the day-out experience. Shoppers are increasingly time poor and want to get the most out of their money and their travel. There aren’t many places in the world that enables guests to shop their favourite brands at significantly marked-down prices, dine in their favourite restaurants, enjoy some competitive socialising and also take in global sport or entertainment, all on the same day.
Daniel: The LDO’s contribution to Wembley Park’s turnover highlights the extent of, and appeal among, our catchment. Our business is ultimately made up of the diversity of our customers, whether they’re visiting for events, a day out with friends and family or residents on the doorstep.
As the first urban fashion and lifestyle outlet in the UK, LDO continues to lead the way for outlet experience. This is partly thanks to our innovative approach, with initiatives like One Wembley Park – an estate-wide programme that offers visitors additional discounts and rewards with every purchase at London Designer Outlet – which keeps guests returning time and time again.
Another key part of the outlet’s success is our collaborative approach to centre management, which we believe is essential for our brands and the outlet to succeed. For example, when there are events at Wembley Stadium, the Ovo Arena, Wembley or across the wider estate, we work closely with them to leverage these opportunities, from their window displays to capacity control.
Are any new retailers, food and drink brands or leisure operators about to take space? What sort of space are they after and why here?
Daniel: We are in talks with a number of exciting new brands to join the centre this year. Whilst I can’t give too much away at this stage, I can say that the swathe of new flagship arrivals at LDO in recent years, from BOSS and Tommy Hilfiger to Calvin Klein, have further enhanced the appeal of the centre amongst like-minded brands that are looking to combine a quality shopping experience with a value offer.
Another year of navigating the cost of living means that we know value for money is still a priority for shoppers, but this doesn’t mean they want to compromise on quality. To best position our outlet and brands to meet these expectations, our focus this year will be the continued increase in the quality of our offer, form instore environment to levels of service available.
By harnessing opportunities to continue the growth of our brand offering, and re-energising our established high performing partners, we will be well positioned to keep delivering this balance for increasingly discerning shoppers in 2024.
Around 28% of the tenants at the LDO have been there since the start, which is incredible. How have you managed to keep hold of them?
Daniel: The reason brands stay is really quite simple: they see incredible success at their LDO stores and the value that a presence at our outlet can offer, with a number of our partners reporting them as their best performing thanks to the combination of our brand mix and discounted prices.
The number of brands we’ve retained over the last 10 years illustrates the opportunity the LDO offers brands to maximise their potential and adapt to shopper demands, through working in close collaboration with us. Of course, we’re always sorry to see brands leave the outlet, but it’s part of the retail life cycle and allows for opportunities to further develop our outlet offering in line with customer needs.
A number of retailers, such as Nike, have upsized their space recently. Who else is looking to take larger units?
Daniel: Levi’s also recently moved to a larger store on our first floor, with Calvin Klein and Tommy Hilfiger in close proximity. The range and quality of brands we have up there now has made it an even more attractive proposition for fashion brands considering opening similar flagship concepts.
There are ongoing talks with a number of brands looking to either upsize or join the LDO for the first time, and we approach all these conversations with the same aim – to ensure we’re establishing the strongest offer and mix possible for our shoppers.
How have you adapted the offer to meet the needs of local residents as well as visitors?
Daniel: Regardless of whether they’re local residents or visitors from further afar, all our audiences want to feel part of something more exclusive. Through One Wembley Park, we’ve delivered a scheme that offers recognition for their shopping behaviours with rewards. With ATV being three times higher for One Wembley Park members than those that aren’t, it’s clear that all our shoppers want the opportunity for a little bit more.
Of course, initiatives are great but the access to brands we offer is what really gets people to visit the outlet. As an insights based business, we use analysis to inform our leasing strategy and ensure that we’re offering brands that resonate with our community and guests.
You have been using turnover-based rents at Wembley for a decade now. How did this help during the pandemic? To what extent did being an outside/inside location also help?
Matt: The pandemic was inevitably a challenging time for everyone and the wider retail industry, but as the UK started to recover we were well equipped to bounce back. Our turnover-based rents approach to leasing ultimately acted as a life jacket for our brands, offering them a secure and stable way of navigating the post-pandemic landscape. With brands having a backlog of stock and collections following the periods of closure, the role of outlet stores for retail took on a new significance.
The indoor/outdoor blend of our site meant that people felt safer visiting us than they did locations that were fully inside, which was crucial in our success over enclosed shopping environments. Interestingly, pre-pandemic, there was some concern about whether we were a little too big, with too much open space, but the value of that was evident as people wanted to get back to ‘normal’ life as safely as possible.
Many in the industry expected the use of turnover-based rents to increase in the past couple of years. Has it increased as much as you expected? If not, why not?
Matt: At LDO, we’ve been using turnover-based rents since we opened 10 years ago, and they’ve been so successful that Quintain rolled them out across the entire Wembley Park Estate. The feature of lower base rents, with turnover rents and shorter lease terms means that we’ve shared both the risk and success of good leasing decisions with our brands, benefiting both parties because we’re both invested in the success of the business. It’s a true partnership.
Barring the pandemic, we’ve seen sustained growth in turnover, rents and income at the LDO as a result of a retail mix that’s kept evolving with changing demands and tastes of our customers. In terms of the wider industry’s approach – evolving a business model isn’t a quick process, so many may still be establishing the best approach for them, but it’s true that the pandemic highlighted the important role turnover-based rates can play for both shopping centres and high streets.
Wembley Park is now one the biggest event complexes in the country (if not the biggest). How do you handle the footfall peaks and troughs?
Matt: We’re proud that Wembley Park is one of the few venues in the world that can deliver truly world-class sport and entertainment, alongside a breadth of shops, leisure, resi and workplaces, and even prouder of the partnerships that go into making this possible.
By working closely with stadia owners and our occupier partners, and through clear communication with our residents and visitors, we’re able to keep things moving. Our business managers support tenants in preparation and planning for event peaks, so that they can continue to deliver the best experiences possible for visitors. Meanwhile, our estate management team works closely with event owners and relevant authorities to ensure safe and secure event day experiences for all our visitors and the local area, while minimising disruption.
To date, Quintain has built more than 5,000 homes of the 8,500 consented. How big is the development pipeline?
Matt: Quintain has a really healthy development pipeline, with 769 homes currently under construction adjacent to Union Park, a seven-acre public park, which is also currently underway, with completion expected in 2025 for all.
With the first three acres of Union Park completed and enjoyed by residents and visitors alike, we’re sure it will continue to be a big draw for the local community and those looking to spend a day at Wembley Park. Alongside the 20,000 residents, expected by completion of the 85-acre development, Wembley Park and LDO will benefit from the increased visitors and doorstep residents as they spend more leisure time across the site.
You’ve been involved in partnerships over the years with the likes of John Lewis. What new partnerships are you involved in or planning to get involved in?
Matt: Our close collaboration with Brent Council over the last 21 years has been our longest standing partnership, supporting driving opportunities for our local communities in addition to meeting their retail and leisure needs. We also have a long term partnership with John Sisk & Son, working together for 17 years now, in addition to Second Floor Studio Arts for the last few years with some exciting plans to be announced later this year.
Additionally, our joint venture with Boxpark continues to go from strength to strength as their offering of events at both community level and wider continues to thrive.
These are just a few of our partnerships, and we look forward to continuing to work with groups and businesses existing and new on some exciting projects later this year.
The LDO celebrated its 10th birthday in 2023. Looking back on the last decade, what has been your biggest achievement? What’s your vision for the next 10 years?
Daniel: To be at our 10th year anniversary and still be delivering record breaking results, in what has been an undoubtedly challenging landscape for retail in recent years, has been no mean feat.
The way our teams have continued to adapt and curate our offering to ensure we can keep delivering valuable experiences for an incredibly diverse range of shoppers has been a real highlight. To still have such a strong core of those brands we started with and be able to complement them with newer additions, has driven us to success beyond our expectations this year.
With Realm’s recent B Corp status, ESG will be an even bigger focus in how we operate over the next five years in line with shoppers’ increasing expectation for a sustainable offering.
Matt: The main aim for us is to build on the great success we’ve had in the past year by keeping customer wants and needs at the core of all the decisions and moves we make.
We’re very insight led, so we know what challenges our shoppers are facing. By providing the right mix of brands, and offering an environment with the adaptability to evolve with ever-evolving consumer behaviours, we’re confident the next 10 years will be a success.
With a general election looming and the economy still struggling, what are your hopes, fears and expectations for 2024?
Matt: We hope that the conditions impacting consumer confidence improve. The industry has already seen shoppers enthusiastically return to physical stores, but uncertainty over recent years has continued to limit people’s ability to focus on what they enjoy.
Of course, people will always be somewhat time-poor, but we’ll continue to deliver an experience at Wembley Park that offers some escapism for when they need it.
Daniel: We’re also really hoping for the continued stabilisation of the economy to allow our brand partners to invest and grow. As growth returns to the economy, we’ll be able to truly fulfil our role for our shoppers by providing incredible brands and great value, in what we understand has been a difficult period.
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