Antoine Frey

I firmly believe in the ability of retail to reinvent itself

Antoine Frey, CEO of Frey, tells Parlons Commerce about his group’s strategy and vision for the future.

What is your analysis of current transformations in retail real estate and how is Frey responding?

Declining turnover in retail is a phenomenon resulting from falling consumption, competition with e-commerce and consumer fatigue in the face of a shopping experience that no longer brings pleasure. This combination of factors makes retailers increasingly resistant to high rents and charges in shopping centres. But we at Frey see this apparently bleak environment as a driver for development: it is precisely this context that justifies our positioning. Our outdoor shopping centres are designed to provide added value in three ways: they are destination places, a part of local life and they offer visitors what we call an ‘enhanced experience.’ And all of that while limiting the rent-to-sales ratio for retailers. It’s below 9% at our new concept Shopping Promenade. And I’m happy to report that Frey’s performance confirms our strategic vision.

Shopping centres cannot escape Darwin’s theory: they must adapt or face extinction. We see fantastic potential in this situation, and it inspires the second line of our strategy: urban redevelopment. All conurbations have an obsolescent retail site that needs restructuring and we are working actively in this field, with early signs of success.

What is your business model?

We build synergies between our three lines of business: real estate, development and asset management. This provides us with three revenue streams, respectively, rent, margin and fees. Each of our fields contributes value and longevity to our assets, creating a virtuous circle that appeals to investors and allows us to finance our growth and continually improve our business model.

How do you see the future of the profession?

I firmly believe in the ability of retail to reinvent itself, basically because it has met the needs of society for thousands of years, and it will no doubt continue to do so even as the future becomes digital to the extreme. Fortunately, innovation applies to more than just technology. France has a wealth of young entrepreneurs who just need a little boost to launch new concepts and revolutionise the consumer experience in our shopping centres and cities. We should welcome their ideas and provide fertile ground for them to prosper. The future of retail will also require greater cooperation between landlords and retailer tenants. It’s up to us to invent the future of retail together.