Posted Sep 21, 2024, 9:44 PM
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Registered User
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Join Date: Apr 2016
Location: Philadelphia
Posts: 1,505
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Quote:
Originally Posted by 3rd&Brown
I work in high end corporate retail.
The Outlet concept would have absolutely flopped there, and it didn't get traction because it was DOA.
What people don't understand about the Outlet business is that it is saturated and that the top 10 outlet locations in the US do something like 70% of outlet volume. The top 2 outlets (Woodbury and Cabazon in CA) do something like 20% of national volume.
True luxury businesses tightly control their inventory purchasing and are getting better and better at it as time goes on, so there simply isn't enough excess product to fuel more than a handful of Outlet locations for that true luxury "discovery" experience. I'm talking about the Gucci's, Pradas, Lanvin's of the world. They have 1 or 2 locations each and that's it and they're at Woodbury and Cabazon and there's nothing more to be discussed.
The next tier is "approachable" luxury like Coach, Kate Spade, Marc Jacobs and while yes they do manufacture specific made for Outlet product masquerading as "excess" so inventory isn't much of an issue they still experience the fact that 70% of their volume is coming from the other 10 locations (think San Marcos between Austin and San Antonio) so every incremental unit/location is not adding enough revenue to justify the degradation to the brand or the expense of the additional rent etc.
On top of that, Outlets work through volume and things like tourist and bus trips, so tenants want to see infrastructure and facilities to support that, like bus parking, car chargers, etc. These are things that the Gallery absolutely did not have and cannot provide.
Lastly, there's a handful of trusted outlet operators (Tanger, Simon, etc) and every good brand has relationships with them and generally expands only through their networks. PREIT is literally nowhere to be found on that list of operators so why would anyone sign up with them as an unproven entity.
The entire thing was sloppy and DOA.
It should have always been big box stores and it's the only thing that will work there. Anything else is a pipedream.
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Well, I'll be the first to admit I knew NONE of all that. I was just going from a traffic perspective. I'll definitely defer to you on this one.
But the big box thing would be great.
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