Are Outlet Centers Thriving?

We heard from more than one person at last week’s ICSC RECon meeting in Las Vegas that outlet centers are performing well, while other sectors are having trouble. This article confirms the same.

Occupancy at Simon’s Chelsea outlets dropped 120 basis points year over year during its first quarter, but was still very high, at 97.9%. At Tanger Outlet Centers, it was 95.2%, up 100 basis points. Meanwhile, Ann Taylor is opening more off-price stores this year than regular retail locations, and Coach, though it no longer breaks out same-store sales of its factory stores, is thought to perform best in the off-price arena.

All of this makes sense to us. Why wouldn’t consumers that still want luxury items but can’t pay the retail price make the trek to their local outlet center. Or will this start to change, too, as gas prices keep creeping up?

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4 Responses to “Are Outlet Centers Thriving?”


  1. 1 Brad May 28, 2008 at 9:18 am

    Took a ride to Tangers Mall in Riverhead, NY last Sunday.
    The place was very crowded. People were buying, and many outlets were having legitimate sales of varying amounts.
    Perry Ellis – 60% off everything in the store.
    J Crew – 50% off select items.
    Greg Norman Golf – 50% off select items.
    This is all great, but typically, the majority of these items are made specifically for the outlet stores. They are NOT the same items found in department stores.
    Caveat emptor.

  2. 2 Janet L. Grady May 28, 2008 at 9:25 am

    Higher gas prices will just become part of the overall
    bargain-hunting motivation for consumers to plan a trip
    to their favorite outlet center, with a shoppng list in hand.
    There may be fewer trips, but those visits will generate
    higher total sales as the outlet stores’ merchandise
    offerings generally improve during touch economic times.
    As sales in department stores slow down, more desirable,
    in-season merchandie moves into this distribution channel.
    Overall, outlets thrive in good times and in bad because
    customers love the thrill of finding a bargain.

  3. 3 Nancy H May 28, 2008 at 11:46 am

    I think outlet centers will continue to do quite well – especially if they are advertising sales. Gas prices are affecting how far people want to go to bargain hunt – but if you can go to one outlet center and hit all the stores you want you will actually save gas, rather than hopping from one location to another to try to find the best price. So many of the outlet malls seem to have stores that aren’t in the regular malls, too.

    I wonder how much online shopping will affect their sales, though – if gas become more expensive than shipping charges?

  4. 4 Michael G. May 29, 2008 at 1:03 pm

    Outlet centers will continue to be a viable shopping option for the masses. Sawgrass Mills in Sunrise/Fort Lauderdale, Florida, is experiencing great success with its broad mix of outlet stores, especially within its luxury brand area, The Colonnade Outlets at Sawgrass Mills. With the economy affecting everyone, the luxury outlet stores are seeing more crossover shoppers from high-end traditional retail, plus a great number of aspirational customers. Because of the weak dollar, visitors from outside the United States are enjoying Sawgrass Mills even more, too. Public demand for great buys in every merchandise category will ensure that destinations like Sawgrass Mills continue to excel.


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