Shopping Centers Today

APR 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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A p r i l 2 0 1 5 / S C T 65 to operate in widely divergent types of properties, according to Goodman. And so, in a sense, outlet capability could al- most be viewed as an extension of the omni-channel imperative. "Retailers are trying to give the customer what they want, when they want it, and how they want it," he said. "Having another chan- nel that is specifically value-priced in that way — and defined as an outlet — is some- thing that could be viewed as another leg of the stool." Having outlet capability can boost re- tailers' flexibility in part because off-price retail is no longer the preserve of mid-tier properties, says David D. Lobaugh, presi- dent of August Partners. "The industry erroneously believes that lower-income shoppers patronize outlet stores, which couldn't be further from the truth," he said. "Thus some want to relegate outlet stores to 'B' and 'C' centers. But we have great stats based on our con- sumer research, both nationally and on a market-by-market basis, demonstrating that among venue types, outlets attract a higher-average-household-income shop- per, and a higher-fashion-goods-spend shopper, than malls." Indeed, according to the VRN–August Partners survey, the average household income of outlet mall shoppers was $84,500, with an average apparel spend of $1,045; those figures were $82,518 and $1,008, respectively, for regional mall shoppers. Regardless whether converting stores is a winning long-term strategy, it is cer- tainly easier for chains to pull off today, now that so many of them operate their own outlet divisions. But one possible brake on the trend may be the potential for objections from other tenants, par- ticularly department stores. "Among some full-priced anchor stores, there can be a concern that if the mall becomes a discount destination, consumers will be preprogramed to expect those discounts," McCandless said. Nor would department stores necessarily want to compete di- rectly with other chains' outlet concepts, Podell says. "The good news is, a lot of the brands that are doing this or that would be good candidates for doing it — Express, Children's Place, New York & Com- pany, J.Crew, PacSun — are not sold in department stores," he said. There is even the possibility that Macy's, which analysts say is on the cusp of moving forward with a T.J.Maxx-like off-price concept, could jump into this game. When and if Macy's does launch its outlet brand, the potential for conver- sion of full-price mall locations in mid-tier malls is intriguing, says Jim Bieri, princi- pal of Michigan brokerage firm Stokas Bieri Real Estate/X Team International. "Macy's has been noodling around with the factory store concept for a long time," he said. "If you are in a 'B' center doing $300 or $400 a foot, and your store is not breaking even," Bieri said, "what have you got to lose?" S C T SCT in your pocket Download it now from your app store! w w w.i c s c.o r g /s c t m o b i l e/ i n d e x .h t m l

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