Forget the ebb and flow of retail — things are just fine from the perch of David Simon, chairman and chief executive officer of Simon Property Group.
The mall operator saw its funds from operations — the standard yardstick for real estate operating performance — gain 16.6 percent to $865.3 million in the first quarter. This came despite decidedly lackluster sales at the retailers it leased space to: Tenants’ sales per square foot inched up just 0.2 percent to $576 versus a year ago.
But demand for space is up, with occupancy as of March 31 rising to 95.5 percent, up from 94.7 percent a year earlier.
“There are a number of key retailers that are really not performing that well,” Simon said on a conference call with analysts. “Yet that has nothing to do with what the market value of that space can be.…Retailers come and go. If we were worried about retail sales, this company was originally built — we had Kmart as our anchors. And if we had looked at Kmart sales, we would have suggested that our sales — our revenues could never grow.”
Rick Sokolov, president and chief operating officer, singled out Lego, Zara and H&M as part of a “very vibrant group of tenants that are looking to expand.”
But expansion is not the rule in retail, and real estate companies, including Simon, are focused on remodels and on the growing outlet sector.
Simon is relocating a Bloomingdale’s at its Stanford Shopping Center in Palo Alto, Calif., and is redeveloping its former location to add 120,000 new square feet of space for small shops and restaurants. And the Saks Fifth Avenue at The Galleria in Houston is being relocated to a new prototype store and the move will open up 105,000 square feet for other luxe stores and restaurants.
Simon said the company expects to invest at least $1 billion in redevelopments annually through 2016.
The company is also looking at expanding its outlet business internationally.
“We have a good outlet potential in Mexico where we got a couple of new sites that we’re pursuing aggressively, including the expansion of our one outlet there,” Simon said. “The Brazilian outlet opportunity is somewhat dormant at this point. I couldn’t find the right sites in the market. We were fortuitous in that the market obviously is correcting there, so we had no capital at risk, and we have nothing necessarily planned there.”
The company is also looking at additional outlet outposts in Asia.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews