FREY Acquires ROS: Europe’s 4th Largest Outlet Operator
In a significant expansion of its portfolio, FREY, a leader among European developers, owners, and managers of large-scale retail parks and open-air shopping centers, has announced the acquisition of ROS, the fourth largest outlet operator on the continent. With this strategic move, FREY now operates 31 sites across nine European countries, showcasing a portfolio valued at over 3 billion euros. This development not only augments FREY’s market dominance in open-air shopping destinations but also diversifies its geographical presence and investment in the high-performing outlet sector.
Antoine Frey, the Chairman and Chief Executive Officer of FREY, expressed his enthusiasm about the acquisition, stating, “We are delighted to announce a major strategic operation for FREY. The acquisition of ROS positions us uniquely in the outlet market, broadening our horizon with a high-performing asset class and diversified geographic exposure. ROS, known for its exceptional leadership and ascendancy in the European outlet market, aligns perfectly with FREY’s vision. Our strategy will amplify ROS’s strengths in third-party management and leverage its esteemed reputation to bolster a dedicated outlet portfolio, beginning with the development of Malmö Designer Village.”
This venture into the outlet sector marks a significant diversification for FREY, which previously focused exclusively on open-air shopping centers. Outlets, characterized by their open-air format, offer consumers value for money through a premium shopping experience. Retail chains find these centers advantageous for expanding their customer base and reinforcing brand presence. Outlets are financially attractive, delivering high sales per square meter and maintaining lower Operating Cost Ratios (OCRs) for brand partners by selling past season collections and overstocks at reduced operating expenses.
A study by Ken Gunn Consulting forecasts a 9% average annual sales growth for European outlets from 2023 to 2026, underlining the financial viability and growth potential of this format. FREY and ROS envision a responsible and engaging retail development strategy that enhances customer experience and retailer performance.
The collaboration between FREY and ROS aims to capitalize on joint strengths:
- Development of new projects utilizing FREY’s development expertise and financing capabilities in conjunction with ROS’s strong brand partnerships.
- Leverage ROS’s marketing prowess to tap into the essence of catchment areas for enhanced asset performance.
- Blend of FREY and ROS’s tenant portfolios to diversify and enrich the merchandise mix across their managed assets.
Despite being a niche, the European designer outlet market, comprising around 210 assets, remains largely fragmented. FREY’s acquisition of ROS targets not only the expansion of ROS’s third-party management activities across Europe but also the establishment of a real estate investment platform dedicated to outlets. This platform aims to include acquisitions, greenfield developments, and transformations of traditional retail spaces into outlets, managed and developed with ROS’s expertise.
FREY, recognized as a mission-driven company and the first in the real estate industry to obtain B Corp certification, commits to restoring retail for the common good. This acquisition allows FREY to apply its positive impact mission across ROS’s operations, aiming to elevate retail service standards and sustainability practices across Europe.
The acquisition of ROS by FREY is a testament to both companies’ shared values and dedication to transforming the European retail landscape, marking a new chapter in their growth and expansion in the outlet sector.
