MALL WALK: I Love Bargains
May 1, 2005 12:00 PM, Beth Karlin Editor-in-Chief
It was a rainy Saturday in Hilton Head, S.C., and traffic on U.S. 278 was backed up for miles. Finally, I saw the sign for Tanger Factory Outlet Center No. 1, and turned into the lot, parking right in front of the Coach store. Convenient.
I love outlet shopping.
Tanger, the Chelsea Property unit of Simon Property Group and Prime Outlets are among those that lure me with designer clothes at bargain prices.
My personal favorite is Prime Outlets Ellenton (Fla.). I always go there when visiting my mother in nearby Sarasota, and often buy something at the Tahari and Versaci stores. Right now, I'm wearing a kicky pair of sapphire blue and gold leather cowboy boots that I bought at the Nine West outlet a decade ago for $20 (above right).
But like the rest of America I'm finding myself traveling less of a distance for discounts. “It takes a dedicated shopper willing to travel a half hour or more to an outlet center,” says Anne Brouwer, a partner at Chicago retail consulting firm McMillan & Doolittle.
I'm a lucky shopper. Loehmann's is a block from my office in Chelsea, N.Y.; Filene's Basement and T.J. Maxx are two blocks away. And Century 21 is just two blocks from my downtown apartment. One Saturday in late April, I counted 28 people in line for the Century 21 dressing rooms, including many foreigners who traveled to the Wall Street area to pay homage to those who died at Ground Zero. The foot traffic in the designer section felt as backed up as the cars on U.S. 278.
Not everyone has such easy access. But then Wal-Mart and Target and the other above-mentioned stores offer brand names for less.
So is further consolidation coming? Bob Brvenik, Prime Retail president, thinks so. In just the past year, he says, the number of center of centers has dropped to 230 from more than 300. Mills Corp., for one, has changed its strategy from value megamalls to flashy centers.
The fact is, outlet sales were nearly flat in 2004, according to Value Retail News. So what are owners doing to increase sales? Selling low-profit properties, for one thing; buying other money-makers, for another. They're also looking abroad. In April, Chelsea formed a joint venture in Korea.
Tanger Factory Outlet Center No. 1 and No. 2 (a mile down U.S. 278 from No. 1) (photos at left) and eight other properties were acquired from Charter Oak last year with partner Blackstone Real Estate Advisors, adding 3.3 million square feet to bring the group to more than 9 millions quare feet.
Prime, rescued two years ago by The Lightstone Group, is getting rid of low-profit centers and spending $100 million to upgrade high-profit ones. Its $25 million renovation in San Marcos, Texas, is modeled after the Piazza San Marco in Venice (rendering above left). The expansion to more than 750,000-square-feet from 600,000-square-feet reflects another trend: attracting more luxury brands. Neiman Marcus Last Call, BeBe and Ermenegildo Zegna are coming to San Marcos.
Meanwhile, says Brouwer, Children's Place, American Eagle and Ann Taylor are searching for more outlet locations, indicating retailers still think there's money to be made.
And some of it will be mine.
