Profile: Brian Collie, McArthurGlen Luxury Retail
Published: 22 December, 2009
Brian Collie, chairman of McArthurGlen Luxury Retail, is looking to transform airport retail
One of the most significant changes in the world of travel retail over the past year has been the spread of McArthurGlen’s Collezioni concept, which has brought luxury brands to the airport retail setting.
The format was first trialled at Venice Marco Polo Airport a year ago, and since then it has been rolled out at Dublin, Porto and Glasgow. McArthurGlen is best known for its designer outlet centres but Collezioni is its first foray into full-price retail, and the fact that it has grown so fast shows that it has been welcomed by both airport operators and luxury brands.
Another reason for its rapid growth is that the business is run by one of the best-connected men in the world of travel retail, Brian Collie. Group retail director of BAA until 2005, Collie is one of the travel industry’s most respected retail figures and is widely credited with the exceptional growth of commercial income at BAA in his 15 years with the company, including a strong focus on luxury brands.
He left BAA to “go plural” as he puts it, and in addition to chairing McArthurGlen Luxury Retail he is chairman of lastminute.com and a non-exec director at Jury’s Inns. But with the launch of Collezione he is clearly enjoying a chance to re-engage with the industry where he cut his retail teeth.
He points out that his relationship with McArthurGlen’s owner Joey Kaempfer goes back to 1995 when Kaempfer brought the McArthurGlen outlet mall concept to the UK and formed a joint venture with BAA. “It really was a meeting of minds,” remembers Collie. “BAA was used to dealing with luxury brands, which were effectively selling at a discount because it was tax-free, and McArthurGlenn brought its existing stable of US brands.”
And over the ensuing decade both businesses, for separate reasons, became more involved with luxury retail. “At Heathrow Terminal 3 we built what was probably the best luxury retail collection in the world, and at the same time McArthurGlen was evolving more towards luxury, especially in the Italian market,” he says.
“We began by asking ourselves if we could come up with a full-price offer that would allow the brands to break into emerging markets.”
But then it became clear that airports offered an untapped opportunity. “The problem for a luxury brand is that if they want to open 60 airport stores they would have to deal with 50 different operators,” Collie explains. “The brands were looking to access the travel retail market but they are fundamentally wholesalers – they don’t have the head office resources to go through that process.”
The decision was made last year to trial the format at Venice’s Marco Polo Airport, partly because McArthurGlen was already hosting a range of ‘altogamma’ brands at its mall on the outskirts of the city, and partly because of Collie’s industry contacts. “I knew the Venice airport people,” he says, “and even through the airport was only four years old it was under-commercialised.”
Surprisingly, for those of us used to UK airports which are crammed with retail, this is a very common problem. “There are a thousand airports in the world that carry more than five million passengers a year, and of those only 20 or 30 are doing it properly,” he says. “These are the ones that can build a big enough team to run a retail operation. Most of the others are local or national government-owned and they usually go for what I call an ‘airport-in-a-box,’ with a convenience-led offer: some catering, a news-led store and some local speciality brands.
“The landowners and the brand owners simply don’t come together,” he explains. “But we can help airports develop a more attractive offer and access an income stream they wouldn’t otherwise have. And we can help the brands access a very attractive market. Air travellers are 80 to 90 per cent ABC1. They are by definition people with disposable income and they have an hour or two to spare. Put that all together and it works for both the landowner and the brand owner.”
The Venice prototype consisted of 1,400 sq m, spread over two levels, hosting 21 brands. The departures level combines a portfolio of contemporary luxury brands such as Bulgari, Ermenegildo Zegna, Ferragamo and Burberry, while the mezzanine level is aimed more towards a younger, fashion conscious traveller and includes the brands Marlboro Classics, Pal Zileri and Diesel. In addition, the upper level offers the Bricco Café and the Pilsner Urquell Bar and also hosts the VIP Suite for Alitalia and the Marco Polo Executive Lounge.
Clearly, airport retail is a different business to mainstream retail or even McArthurGlen’s outlets. “Space is at a premium but you can achieved four or even five times the sales density,” says Collie. “And in an airport you’ve got to have up-to-the-minute stock. If someone has bought Vogue from WH Smith they want to see the handbag they’ve been reading about.”
The Venice roll-out was followed in short order by two more sites, at Dublin and Porto. Again, Porto is a relatively new airport but one which had not punched its weight in retail terms. Collezioni has delivered 14 prestige stores across freshly designed retail space, along the main passenger flow in the international departures lounge.
And at Dublin airport, Collezioni opened with six units, housed in the €55m new extension at Terminal 1. LK Bennett, Calvin Klein Underwear and Boggi Milano are already trading and Superdry has just opened in the last unit.
Collie points out that the Dublin offer is very different to Venice, illustrating the flexibility of the Collezioni concept. “Our operation at Dublin is a powerful reminder of the true potential for fashion retailing at the airport and highlights the fact that we can enable any commercial airport to develop its own unique adaptation of the Collezioni concept,” he says.
But he has already made a proposal to the Dublin Airport Authority to open a more up-market Collezioni in the new Terminal 2 which will take the long-haul traffic when it opens next year.
The fourth Collezioni location opens this winter at Glasgow Airport, with 11 new stores concentrated in a curved avenue in the new look departure lounge, part of a multi-million pound revamp of the airport terminal.
So where next? “We could comfortably do two a year,” says Collie, “but it’s very opportunistic. We need an airport operator with a commercial outlook and of course we need the space. That usually becomes available when an airport’s having a reconfiguration or an extension.
“I wouldn’t be surprised if Collezioni had 20 to 25 sites in five years time, and then it’ll be a brand in its own right. We really have got a lot of opportunities,” he concludes.
