Big city malls the future for Klepierre in battle with online

Mall operator Klepierre is focusing on Europe’s most dynamic and affluent big cities and offering experiences beyond shopping to compete with fast-growing online retailers, its chairman Jean-Marc Jestin told Reuters on Tuesday.

Shein, which sells in more than 150 countries online, has emerged as a major player and accounted for nearly 20% of the global fast-fashion market in 2022, outpacing Inditex’s Zara and H&M, both Klepierre tenants.
“I don’t believe in the disappearance of physical retail … but rather in a concentration, and so all our work has been to concentrate on the big cities, the big shopping centres, which are the most dynamic,” Jestin said in an interview.

Klepierre’s tenants, which also include LVMH-owned cosmetics retailer Sephora, Tommy Hilfiger, Lacoste and Apple, look for more glamorous and tech-savvy shopping centres, with restaurant and entertainment offerings, while also developing online services, he said.

Among the attractions Klepierre is offering to get people into its malls are yoga and dance classes, concerts and movies.

They are spending their money in particular on sports clothing, sports equipment, health, beauty and personal services — spanning brands such as JD Sports, Adidas, Foot Locker, Rituals and Sephora, Jestin said.
Retailers are now much more diversified, he added, with brands such as ABF’s Primark, Normal and Action attracting both budget and more affluent shoppers.

Meanwhile, online can account for up to 35% of sales in Klepierre’s shopping centres, up from 5-6% about a decade ago, its chairman said.

“The brands we work with today … are omni-channel, so today they make around 20% to 30% of their sales online, and some are rising, like Mango, to more like 40%, so they need fewer physical shops and are therefore more selective.”

Jestin said that 10 years ago, Klepierre had 330 shopping centres, compared with just above 70 today.
“It’s a good thing we made this change, because if we hadn’t, I think we’d have a lot of shopping centres today where it would be difficult to attract retailers and customers,” Jestin said.

As part of the effort to strengthen its presence in major European cities, Klepierre announced on Tuesday the acquisition of the RomaEst shopping centre in the Italian capital.