By Thibault Paquin, Celebrating Life
With the recent opening of Aux Ateliers (Besançon) following the openings of Hall U Need (Lille) and Seven Squares (St Etienne) in 2021, a new format of extra-large FECs has arrived in France, in the least expected times of a global pandemic. I looked into this new format of location-based entertainment and spoke with Cyril Parenna from Hall U Need to understand more about this trend for XXL FECs, and why it is taking off now.
The trend for XXL FECs
Parenna was clearly inspired by the successful model of Dave & Buster’s in the USA. With 136 stores pre-COVID, including 109 large formats (3-4,500sqm), the company achieves average sales of $10 million per store. This is roughly split 40% from food & beverage and 60% from games.
After looking for a site in Lille for over two years, Parenna opted to take over a 7,000sqm event and exhibition hall housed in a former wool-spinning factory to open his Hall U Need concept. This is not dissimilar to what the founders of Aux Ateliers did in Besançon. They took over a former welding factory to open their 7,000sqm venue.
This makes me think we are possibly seeing here the emergence of a new category of assets, as the result of a conversion of non-performing assets (due to COVID or not) into stand-alone entertainment venues. Such location types offer big spaces and are easily convertible, with high ceilings and large parking facilities.
New anchor tenants bring benefits
Other operators, such as Seven Squares, prefer shopping malls or retail parks. The first Seven Squares occupies 7,000sqm at the new Steel, a mall owned by Apsys in St Etienne. They are also already in talks with other retail developers for future venues in other cities. For instance, Lille, Grenoble, Geneva and Paris.
29% of Gen Z would visit a shopping mall more often if there was an FEC.
For mall owners, these new anchor tenants are very attractive. They can drive as many as 500,000 visitors a year, whilst bringing quality entertainment, therefore helping mall owners navigate the shift in customers’ expectations.
Indeed, according to a recent LDP / A Different View survey, 29% of Gen Z would visit a shopping mall more often if there was an FEC (the highest score among pay-to-enter activities).
Big investments
The investment cost for a well-built FEC is a minimum of €1,500 per sqm, i.e. around €10million per venue.
When I spoke to Parenna, he shared that he is not looking at a short-term investment for these XXL FECs. Accompanied by the French sovereign fund BPI, he aims to build a series of venues, targeting a very wide audience of repeat visitors as catalysts for other venues and businesses to be created in the same area, which will, in return, solidify his business.
The variety of activities offered, the multi-generational appeal and the repeat business in such venues make them attractive for investment funds, increasingly looking into the leisure and hospitality sector.
This is the case of both Urban Loisirs (operating the brand 1055) and Garcin SARL (operating the brand Seven Squares), who recently closed on significant fund-raisings for future expansion.
See also: Elev8 Fun: reinvigorating empty mall spaces across the US
Extra social venues
The role of these new XXL FEC venues is very much social. And it is, in a way, ironic that they opened during the pandemic; if only to remind us that the need people have to get together has always been stronger than war, disease or any other disaster.
In tough times, people want to think of something else and, above all, to have fun.
When Parenna came up with the idea of Hall U Need, he saw an unmatched need in the market for a place that could accommodate almost all the social activities’ needs under one roof: dining, entertainment, meetings, etc.
He was not mistaken. Shortly after his opening and despite COVID, his 400-seat restaurant was full every weekend. Plus, he was bombarded with inquiries for incentives and social events. With his large meeting room and cash cards handed over to participants for use in games or F&B, he is able to charge more for his corporate packages than a 5-star hotel, because he combines the meeting and entertainment components in one single place.
Also, programming events such as concerts or sports-viewing is made easy in these XXL venues (even with social distancing) and it helps to bring the local community together.
For Dave & Buster’s, “Watch” is one of the four pillars of the brand. And it is certainly one of their keys to success. Parenna too integrates that in his model. Events allow him to address a multi-generational audience. It gives them multiple reasons to come back for something different every time, but always with the same good vibes and fun.
Eatertainment
In these new XXL FEC venues, there is a strong focus on food. It’s not just adding food to the entertainment, it’s eatertainment: emphasizing the quality and uniqueness of that food, and melding that into an entertainment-based venue so both enhance each other.
Everywhere in France, the food offering is increasing in quality and diversity. Take, for example, the popular Biltoki food markets popping up around the country, reflecting the gastronomic identity of their regions. Well, people expect the same from their local entertainment venue.
Aux Ateliers offers 3 different F&B options. This includes a bistro, a street food corner and a cosy wine bar on a mezzanine. Meanwhile, Seven Squares came up with La Cocotte Stéphanoise. This is a cosy dining concept offering seasonal dishes that are 100% cooked on-site from local ingredients, together with a wide variety of wines.
At Hall U Need, F&B makes up for 65% of the revenue. Parenna has also opted for fresh ingredients cooked on-site. He sees his customers wanting to eat more healthy and to know where the food they eat comes from. To that, he adds variety with a menu that changes every week. As a result, customers are motivated to come back often.
The dining area is generous and done in an elegant contemporary design. This means that it can attract a wide variety of diners, including those who don’t play games (office lunch, etc.). For Parenna, it is important to offer a premium environment with quality carpets and comfortable sittings. This goes against the preconceived ideas of cheap F&B offerings in FECs.
XXL FECs: the perfect storm
This new trend of XXL FEC’s in France might be the result of several things happening at the same time:
- Funds available from investors eager to enter the experience economy
- A new category of assets ready to be repurposed
- A need from people to socialize, even more so with COVID
- A change in eating habits with the emergence of eatertainment
Surely Cyril Parenna will soon be busy rolling out his Hall U Need concept in France and Europe, spreading fun, conviviality and good food!
