Springtime might finally be coming to the mall.
Or at least the top-tier A malls.
Robert Taubman, chairman, chief executive officer and president of Taubman Centers Inc., said tenant sales per square foot rose 12.4 percent in the first quarter and 13.4 percent on a net operating income-weighted basis. (Sales for the trailing 12 months tallied $837 a square foot, up 5 percent to a record high).
“These results were materially different than what we’ve seen the last couple of years,” Taubman told analysts Friday. “In fact, this is the best quarterly sales results since the first quarter of 2012.…Sales growth was very broad-based, with almost every one of our centers up. Sales in our assets from Florida to Hawaii were strong across the board.”
Sales of apparel, the landlord’s largest category, were up 10 percent, while women’s shoes shot ahead 20 percent.
Luxury also continued to show strong momentum, with Taubman singling out brands such as Gucci, Tiffany and Dolce & Gabbana. But he also pointed to a “notable rebound in unisex apparel” from Banana Republic, Abercrombie & Fitch Co., Uniqlo Co. Ltd., Gap Inc., Eddie Bauer, Ralph Lauren Corp. and Aéropostale Inc.
“All in all, we’re delighted with our results this quarter,” he said. “We’re hopeful we’re seeing the initial signs of a real rebound in retail.”
While the holiday season was stronger than most expected, it’s been a tough slog for retailers in recent years and that kind of bullishness stands out.
Taubman pointed to signs of stability in February, while pouring over results from last year, and the trend seems to have strengthened in the first quarter. (Government figures showed that overall first-quarter retail and food service sales rose 4.1 percent from a year earlier, while apparel an accessories stores rose 3 percent).
Despite the continuing worries about store closures as e-commerce sales rise and Millennials prefer to seek out experiences, the ceo said “financially healthy retailers are actively seeking a space.”
“These brands are being highly selective about the real estate decision and are only looking at opportunities in the best markets in great assets like ours,” Taubman said.
Among the company’s properties is The Mall at Short Hills in New Jersey, where Burberry and Salvatore Ferragamo expanded to larger-format stores. Lululemon Athletica is taking a bigger footprint and Canada Goose just agreed to open its first U.S. mall store.
“We’ve said for some time there will be divergence between A malls and all others,” he said. “We believe our results reflect that this quarter.”