Frey Group’s Strategic Expansion into the Outlet Market: A New Era for Retail

In a rapidly evolving retail landscape, Frey Group is making significant strides in the outlet market, capitalizing on changing consumer behaviors and economic uncertainties. According to the latest report from the Business of Fashion (BoF) and McKinsey, titled The State of Fashion 2025, over 70% of consumers plan to shop at outlet and off-price retailers in the coming year. This trend underscores a growing preference for value-driven shopping, even among those with increased discretionary budgets.

Consumer Sentiment: A Shift Towards Value

The current economic climate has led to a notable decline in consumer confidence. The State of Fashion report indicates that sentiment across major markets, including the Eurozone, the United States, and China, remains significantly below pre-pandemic levels, with a drop of 10 to 30 percentage points compared to 2019. In the U.S., U.K., and Germany, more than 40% of shoppers report spending less on fashion than they did a year ago. Globally, over 80% of consumers plan to maintain or reduce their spending on clothing, footwear, and accessories in 2025.

This shift in consumer behavior is not limited to lower-income brackets; it spans all income levels. In the U.K., over 60% of consumers are actively seeking ways to save on fashion, a figure that rises to 75% in the U.S. Even premium shoppers are increasingly opting for more affordable options, whether through outlet shopping, resale markets, or alternative payment methods like buy now, pay later.

Frey Group’s Strategic Acquisition

In response to these market dynamics, Frey Group has made a strategic move by acquiring ROS Retail Outlet Shopping, the fourth-largest outlet operator in Europe. This acquisition positions Frey Group to tap into a market that attracts approximately 25 million visitors annually across eight countries.

Frey Group is also developing the Malmö Designer Village, set to become Scandinavia’s largest premium outlet destination. Located just 20 minutes from Malmö and 50 minutes from Copenhagen via the Øresund Bridge, this new development aims to serve a catchment area of 3.8 million residents and over 10 million annual tourists. The project will feature more than 130 stores across 26,000 square meters, offering a curated mix of international and Scandinavian premium brands, alongside amenities like landscaped gardens and a street food market.

The Outlet Experience: Value Meets Aesthetic

Antoine Frey, chairman and CEO of Frey Group, emphasizes that the outlet sector thrives on two key factors: significant discounts and an engaging shopping experience. Consumers are drawn to the allure of finding beloved brands at discounts ranging from 30% to 70%. Additionally, the architectural design of outlet centers enhances the shopping journey, creating a “fantasy” environment that is both inviting and organized.

Frey notes that the outlet business model differs fundamentally from traditional retail. While full-price retailers rely on frequent visits from local customers, outlets attract shoppers from greater distances, often making only one or two visits per year. This model fosters a different kind of relationship between landlords and brands, characterized by data sharing and collaborative strategies to optimize sales.

Meeting Diverse Consumer Expectations

Frey Group’s approach to the outlet market is centered on creating a diverse and appealing mix of brands that cater to both premium and mid-market shoppers. The company collaborates closely with brands to ensure that the product offerings align with consumer preferences, continuously refining the shopping experience through improved merchandising and architectural design.

Malmö, in particular, presents a unique opportunity for Frey Group. The outlet market in the Nordics is still underdeveloped, with existing options lacking in both merchandising and customer experience. Frey aims to set a new standard for premium outlets in the region, leveraging Malmö’s strategic location to attract customers from both Sweden and Denmark.

Differentiating Malmö Designer Village

The Malmö Designer Village is poised to stand out from existing retail destinations in several ways. First, the merchandising mix will include not only international brands but also a selection of the best Nordic brands, appealing to local consumers who often prefer a more understated style.

Second, the development will feature a highly experiential street food market, addressing a common shortcoming in many outlet centers. Finally, the architectural design will draw inspiration from Nordic traditions, creating a picturesque village atmosphere that enhances the overall shopping experience.

Commitment to Sustainability

Sustainability is a core principle for Frey Group, which is a certified B Corporation. The company is committed to reducing its carbon footprint and aims to make Malmö Designer Village a benchmark for sustainable outlet shopping. Notably, the project will be the first outlet to utilize geothermal energy for heating and cooling, a significant investment that underscores Frey’s commitment to environmental responsibility.

Frey Group is also prioritizing the use of local materials, such as wood and stone, to minimize emissions during construction. With 95% of an outlet’s carbon footprint stemming from Scope 3 emissions-primarily related to visitor transportation-Frey is taking steps to mitigate its impact in every area possible. For instance, the design will include double electric doors to reduce energy consumption, a detail that reflects the company’s focus on sustainability.

Future Opportunities for Expansion

Looking ahead, Frey Group aims to expand its footprint across Europe, particularly in markets like Italy and the U.K. The company has already made inroads in Italy by acquiring three outlet villages from the Land of Fashion portfolio. Frey Group’s strategy is opportunistic, focusing on acquiring the best assets at competitive prices, whether they are actively on the market or require proactive engagement.

Currently, Frey Group ranks third in Europe based on assets under management, but the company is determined to ascend to the top position in the outlet sector. With a robust strategy and a commitment to sustainability, Frey Group is well-positioned to reshape the European outlet landscape.

Conclusion

Frey Group’s strategic expansion into the outlet market reflects a keen understanding of evolving consumer preferences and economic realities. By focusing on value, experience, and sustainability, the company is not only poised to capture a significant share of the retail market but also to set new standards for what outlet shopping can be. As the Malmö Designer Village takes shape, it promises to be a transformative addition to the Scandinavian retail scene, offering consumers a unique blend of premium brands, engaging experiences, and a commitment to environmental responsibility.