state of the outlet industry

Culture of Value

Today’s consumers and retailers are entering outlet malls faster than one

can say 30% off!

- Shopping Centers Today, April 2010

Culture of Value

Just a decade ago consumers linked outlet malls to a hit-or-miss or shopping experience

How times have changed…

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

To name a few…

And this year…

Is slated to open its first outlet ever at Woodbury Common

“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.”

- Charlie Wetzel Buxton Co., a consumer analytics firm

Outlet Occupancy Up

Full price mall occupancy fell to 89%

Outlet mall occupancy held up well at 95%

Mergers & Acquisitions

Property Group, Inc. Property Group, Inc.

+

‘04 ‘07‘09

Where are we headed?

Outlet properties are outperforming regional malls:

Occupancy (97.9 vs 92.1) Sales psf ($500 vs. $433)

Property Group, Inc. Property Group, Inc.

Where are we headed?

Simon is retooling former Mills properties to function more like outlet malls

More retailers are developing outlet strategies

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

Where are we headed?

Five years ago data showed:

•65% of shoppers frequented shopping malls

• 25% outlet malls •10% crossover

Source: Greenberg Data

Where are we headed?

Today:

•45% of shoppers frequent shopping malls

• 35% outlet malls •20% crossover

Source: Greenberg Data

Where are we headed?

Outlet shopping has stayed strong during the

spending downturn by the American consumer.

Where are we headed?

As such the outlet shopper profile has broadened

Savvy shoppers who want “lifestyle for less”

Cut out the middle man

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

Planned OpeningsOnly large outlet developer to plan a Phase 1 opening

in 2010

Opening October 2010Leeds, Alabama

Planned Openings

Chelsea has three centers slated to open in 2011:

•Tampa•Phoenix

•Merrimack, NH

Planned OpeningsHorizon Group has two centers

opening in 2011

•Atlanta•Oklahoma City

Planned Openings

Craig Reality working on several centers/expansions

Talisman planning two ground up centers: Chicago and

Cabazon, CA

Planned Openings

Outlet veterans looking to tackle Alaska and Hawaii

We’re an industry in motion…

International Outlet Shopping Centers and Regions for Development