State of the Outlet Industry

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by David Ober, president of DOCR. Contact info - 717.314.2468

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State of the Outlet Industry

  1. 1. Culture of Value Today’s consumers and retailers are entering outlet malls faster than one can say 30% off! - Shopping Centers Today , April 2010
  2. 2. Culture of Value Just a decade ago consumers linked outlet malls to a hit-or-miss or shopping experience How times have changed…
  3. 3. Culture of Value Today outlets are being built in metro areas not en route to them More retailers are opening or tailoring products to them
  4. 4. To name a few…
  5. 5. And this year… Is slated to open its first outlet ever at Woodbury Common
  6. 6. <ul><li>“ If you’re not looking at how an outlet store can positively affect your network, you’re not going to be able to effectively optimize your market.” </li></ul><ul><li>Charlie Wetzel </li></ul><ul><li>Buxton Co., a consumer analytics firm </li></ul>
  7. 7. Outlet Occupancy Up Full price mall occupancy fell to 89% Outlet mall occupancy held up well at 95%
  8. 8. Mergers & Acquisitions Property Group, Inc. + ‘ 04 ‘ 07 ‘ 09
  9. 9. Where are we headed? Outlet properties are outperforming regional malls: Occupancy (97.9 vs 92.1) Sales psf ($500 vs. $433) Property Group, Inc.
  10. 10. Where are we headed? Simon is retooling former Mills properties to function more like outlet malls More retailers are developing outlet strategies
  11. 11. Where are we headed? Over the past 3 years: More retailers are opening outlet stores than full price concepts The word “sensitivity” seems to be evaporating
  12. 12. Where are we headed? <ul><li>Five years ago data showed: </li></ul><ul><li>65% of shoppers frequented shopping malls </li></ul><ul><li>25% outlet malls </li></ul><ul><li>10% crossover </li></ul><ul><li>Source: Greenberg Data </li></ul>
  13. 13. Where are we headed? <ul><li>Today: </li></ul><ul><li>45% of shoppers frequent shopping malls </li></ul><ul><li>35% outlet malls </li></ul><ul><li>20% crossover </li></ul><ul><li>Source: Greenberg Data </li></ul>
  14. 14. Where are we headed? Outlet shopping has stayed strong during the spending downturn by the American consumer.
  15. 15. Where are we headed? As such the outlet shopper profile has broadened Savvy shoppers who want “lifestyle for less” Cut out the middle man
  16. 16. Where are we headed? We now have stores operating at $800-$1,000 per sq. ft. Strict tenant sale policies – minimum of 30% off MSRP
  17. 17. Planned Openings Only large outlet developer to plan a Phase 1 opening in 2010 Opening October 2010 Leeds, Alabama
  18. 18. Planned Openings Chelsea has three centers slated to open in 2011: <ul><li>Tampa </li></ul><ul><li>Phoenix </li></ul><ul><li>Merrimack, NH </li></ul>
  19. 19. Planned Openings Horizon Group has two centers opening in 2011 <ul><li>Atlanta </li></ul><ul><li>Oklahoma City </li></ul>
  20. 20. Planned Openings Craig Reality working on several centers/expansions Talisman planning two ground up centers: Chicago and Cabazon, CA
  21. 21. Planned Openings Outlet veterans looking to tackle Alaska and Hawaii We’re an industry in motion…
  22. 22. International Outlet Shopping Centers and Regions for Development

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