igrating from their
boondock origins and
creating their own
boom towns, outlets
are no longer on the
outskirts. Outlet malls have evolved to
become part of both Main Street and
the mainstream shopping experience.
Gone are stores with a warehouse feel
and outdated merchandise on out-of-the-way parcels. These transformations
are more eye-catching and centrally
located. Adding a chic vibe, well-known
brands are creating cachet with items
for less cash in high-traffic suburban
and metro areas. For luxury designers,
especially, outlet has become an aspirational bridge—an important introduction to the product line.
Settings are less stressful and more
entertaining. Today’s thoughtful
approach infuses diverse dining
vignettes, popup gardens, and restful
seating areas into large footprints.
The result: Customers are reaching
for their wallets, in droves. “Outlets are
and have been the main growth vehicle
in the retail-real-estate sector for the
last five years,” says Steve Ferris, EVP
of global property consultancy JLL.
Outlet centers are consistently performing well with strengthening sales,
increasing rents, low vacancies, and significant construction activity, according
to JLL. The firm’s latest available figures (from Q3 2015) show:
• 41 outlet centers have opened in North
America within the past four years,
totaling almost 15 million sq. ft.
• They represent $45.6 billion in sales, up 8.6% from $42 billion in 2013.
• Sales per sq. ft. grew from $532 in 2013 to $545 today.
It wasn’t always that way. “Historically, outlets were developed in cornfields,” says
Developers are opening new centers in urban/metro areas; the Fashion Outlets of
Jim Harkin, SVP and principal at retail design firm FRCH. “But that was back in
Developers originally chose remote locations due to wholesale sensitivity to major
brands in department stores. Over the past decade, barriers have been broken down.
Chicago, for instance, is about 10 miles from three major malls, says JLL’s Ferris.