Wendy Hall

Consumer Industries Reporter

PROPERTY development group Spearhead will open a shopping mall in Cape Town that will offer retailers an opportunity to sell excess stock in a branded environment.

The mall, named Sable Square, is the first of its kind in SA and it will be located near Century City. The mall aims to attract consumers from both the high street retail shops and factory stores.

“It presents a distribution opportunity for retailers and distributors and will protect the brand’s integrity, as people will shop in a branded store in a convenient, pleasant shopping environment,” leasing agent for Spearhead, Johanna Hult said.

Tenants who have committed to open stores in the centre include Adidas, Tommy Hilfiger, Rage shoes, Bondi Blue, Polo Sport and Jeans, and Pick ’n Pay.

Hult said the centre was 70% let and was on track to open in September. The concept is well known to retailers in Europe and the US, Hult said.

The stores would display the previous season’s stock, or surplus stock that high street stores were not able to move. They would attract shoppers by offering a discount of at least 30% on merchandise.

“Factory shops are not always in convenient locations, or in pleasant shopping environments.

“Outlet stores give retailers the opportunity to sell slow-moving stock, rather than to make a high margin,” Hult said.

The concept of the outlet store originated in the US in the 1980s. There are more than 300 overseas retailing such brands as Pringle of Scotland, Versace, Nicole Farhi and Burberry.

In the US and Europe it was common for big branded clothing manufacturers such as Adidas to manufacture lines specifically for their outlet stores, Hult said.

International sport and leisure wear brand Tommy Hilfiger used outlet retail stores in the US and UK to sell off surplus stock without jeopardising the exclusivity of its brand.

It opened one outlet store for every seven new mainstream stores.The strategy allowed it to balance new stock sales and the clearance of excess stock.

European group Value Retail had developed seven outlet villages in major European centres selling brands from Billabong to Versace at a discount.

Each site was carefully selected for its location close to a major cosmopolitan market that had an established retail core and cities that re popular tourist destinations.