After shopping streets and malls, factory outlet stores have become the new destination for the fashion conscious.

Shanghai Outlets, with some 240 discount stores of top fashion brands, has reported its sales exceeded 570 million yuan since it opened in April last year.

Sales during the three-day anniversary promotion before May Day reached 12 million yuan, when even its huge parking lot had a tough time coping with 9,000-odd cars.

An ecstatic Ge Weiyong, general manager of Shanghai Outlets Brand Direct Sale Plaza Co Ltd, which runs the operation, said: "A year ago, we had to use our relationship, such as our parent company, Bailian Group, to beg global brands to come to the area. Some thought they would stay only for a couple of months as they were skeptical of our business prospect.

"But now top fashion brands are waiting in line for a spot here, and no one wants to leave."

Burberry, Bally and Trussardi are among the new arrivals in the last few weeks, joining a legion of brands such as Armani, Zegna, Givenchy, Canali and Hugo Boss.

According to Ge, sales are expected to hit 750 million yuan this year. "We will march toward the 1-billion-yuan goal next year."

Located in Zhaoxiang of Qingpu District and only 10 minutes' drive from Hongqiao Airport, the landscaped outlet store is a 470-million-yuan venture, 95 percent of which is held by Shanghai Bailian Group and the rest by Hong Kong's Wharf Holdings.

Ge said the company is considering the possibility of opening another such store in a neighboring city.

But Ge's business will soon have a strong rival in Shanghai in the form of a 70,000-square-meter outlet store that's to open in Luodian of the city's Baoshan District. The 300-million-yuan investment is a joint venture of Shanghai Jinluodian Development Co and US factory store retailer Craig Realty Group.

Lack of scale has been a major hurdle to the development of small factory outlet stores in Shanghai. The Orient FoxTown Factory Outlets, a joint venture between the Switzerland-based FoxTown Factory Stores and Orient International (Holding) Co Ltd, has drawn less than 40 global brands since it opened last June.

(China Daily 05/09/2007 page15)

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