It’s not just shoppers who are seeking outlet center deals.
While development in the full-price shopping center sector has ground to a halt, projects continue to pile up in the outlet sector. As many as 50 U.S. outlet centers are in the planning stages, which, if completed, would represent an almost 25 percent jump in locations from the current slate of roughly 220 centers in the country, growth unheard of in recent history, but still not large enough to return the outlet market to its apex, when 285 or so outlet centers dotted the American landscape 14 years ago.
“There are a lot of people trying to jump on the development bandwagon. Outlets are doing well, and it is easy to put forward a proposal, but making it happen is more difficult,” said Adrian Nelson, group leasing director at the McArthurGlen Group, the London-based designer outlet company.
Outlet centers’ consistently strong results make them very attractive. For 2012, Value Retail News estimated the outlet industry’s total sales were $25.4 billion, $3 billion higher than its 2011 estimate. Turning to specific companies, comparable tenant sales for Tanger Factory Outlet Centers Inc.’s consolidated portfolio increased 2.3 percent to $380 a square foot for the year ended March 31. Sales a square foot at Simon Property Group’s The Mills properties, which combine outlet and traditional retail, climbed 5.4 percent to $510 in the year ended Dec. 31.
“A strong outlet center will always outperform a strong regional mall. Some of these outlet centers are performing double what typical malls do,” said Wagner. “If you look at certain brands, their outlet business is exponentially huge compared to their full-price stores.”
Even if the country’s persistent economic issues fade, Steven B. Tanger, president and chief executive officer of Tanger Factory Outlets, doesn’t think the popularity of outlets will diminish. “The value proposition is embedded in the lifestyle of today’s consumer, and outlets are the natural destination of choice for branded apparel,” he said during the company’s first-quarter earnings conference call. “The old adage is true: In good times, people love a bargain, and, in tough times like these, people need a bargain.”
Americans aren’t alone in their passion for outlet shopping. Scott Malkin, chairman of London-based Value Retail and cochairman of Value Retail China, said the company’s nine properties in Europe generated $1,400 in sales a square foot last year, led by its Bicester Village near the Cotswolds with $3,000 in sales a square foot.
Tourists from outside the European Union account for 25 to 30 percent of the visits at Value Retail’s properties, according to Malkin.
Like their American counterparts, European outlet companies are breaking out the shovels. China is a common destination. Value Retail is scheduled to open Suzhou Village in China next year with 100 boutiques and restaurants, and Malkin disclosed the company has been selected to build outlets at Shanghai Disney. “In China, you are going to have a wave of outlet center construction because there is very little of the product in existence,” he said. “Brands have been growing at full price and haven’t been pushed to be more efficient in terms of correctly disposing of their surplus. That’s all coming now.”
Canada has also been a country of choice for outlet developers. Malkin estimated 30 projects are in the works in Canada, which he described as “traditionally underserved by outlet shopping.” The biggest designer outlet center developer in Europe, McArthurGlen, will open an outlet center near the Vancouver International Airport next year. That center is expected to eventually have 370,000 square feet.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
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@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion