MRM - 2019 Universal Registration Document

1

Information on M.R.M.’s activities

Presentation of the Company

With its hand forced due to a lacklustre performance, the Casino Group sold two portfolios to Apollo Global Management and to Fortress for €497 million and €501 million, respectively. Outlook The sale of shopping centre portfolios points tomajor investment volumes for 2020, which should reach approximately €4 billion. The retail market Source: Extract from the CBRE study: “Real estate outlook France – Au-delà des marchés en 2020, quel(s) immobilier(s) à l’horizon 2030? (Looking beyond 2020 markets to real estate outlook in 2030)”. Both companies and investors are continuing to adapt to meet the new challenges arising from the major changes across the sector. Changes in consumer trends 2019 saw structural changes to consumer trends which went beyond economic fluctuations. These include an increase in the proportion of housing costs in relation to overall household expenses (now 20%), a collapse in the personal goods sector (down to under 3%), a fall in the food sector (10%) and an increase of leisure (13%) and well-being (3.5%) expenses, reflecting new requirements and the choices that need to be made. Personal goods are one of the sectors which is struggling the most. The revenues of French textile and clothing distributors are in constant decline (down 2.8% in 2018 and 1.3% over the first nine months of 2019). Both French and international mass market ready-to-wear brands are fighting challenges which point to a sector in crisis, including cutbacks at Vivarte and Happy Chic, the withdrawal of Forever 21 and New Look from the French market, and a poor performance from Gap. Ready-to-wear brands such as H&M, Inditex and Camaïeu are making trade-offs to focus on more profitable locations.

open to customers (click and collect, drive through, home delivery, etc.). The growth and survival of retail businesses is therefore increasingly dependent on their ability to adapt to these changes. In 2019, with France’s first shopping centres celebrating their 50 th anniversaries, the traditional model is now under question. As a result, the 230,000 m² Europacity retail project in Seine-Saint-Denis was abandoned, as it was deemed to be “out-of-date and obsolete”. Indeed, the construction of new centres has been scaled down, with the emphasis on consolidating existing facilities. Many shopping centres are struggling with the changes in consumer behaviour and competition from online services. They are inventing new concepts, developing an events offer, and incorporating a wider and more original range of leisure and restaurants to adapt to consumers’ changing preferences. For example, the Cap 3000 extension will include an aquarium, while Créteil Soleil will house six cinema screens and 15 new restaurants. The new Lillenium centre due for completion in April 2020 will include a range of restaurants, as well as a 1,266 m² children’s play area. New locations and new formats Brands are developing new formats which are adapted to their customers and location. New sites are guided by footfall, distribution criteria and catchment area. Therefore, traditionally suburban brands are now moving to city centres to move closer to the consumer. DIY and home retailers are now following in the footsteps of supermarkets by creating smaller outlets to meet the needs of urban customers. Ikea opened its first city centre store in the Madeleine area of Paris, while Gifi has developed urban concept stores, and Leroy Merlin has launched DIY workshops in the capital’s Marais district. As well as opening more small urban outlets, major supermarkets with very large surface areas are reducing the retail area of their hypermarkets, refocusing more on food, and upgrading the quality of their products. Transit points such as stations, airports and motorway service stations are also developing commercial products and services to suit the needs of their visitors. Although transit point retail is not a new idea, strong performance in this area suggests that the structuring and diversification of commercial products and services is realigning with new consumer requirements. Moreover, although the model still needs to be proven, the number of outlets located in new mixed areas is steadily rising to meet urban, local and service demands.

New products and services to meet new requirements

Physical retail is currently undergoing structural changes linked to changes in consumer trends, to fulfil new consumer aspirations and the rise of e-commerce. The retail economy is continually rebuilding itself, whereby it is seeking new concepts and developing services and new distribution processes. All brick and mortar stakeholders are now implementing omni- channel strategies, where digital boosts the range of services

16

M.R.M. 2019 UNIVERSAL REGISTRATION DOCUMENT