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?