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Lauren Leach: Can Outlet Center Operators Avoid the Worst of the U.S. Retail Fallout? – National Real Estate Investor

Lauren Leach was quoted in National Real Estate Investor‘s article titled “Can Outlet Center Operators Avoid the Worst of the U.S. Retail Fallout?”

Outlet centers are outshining regional malls for several reasons, says Lauren Leach, director of real estate at Birmingham, Mich.-based consulting and advisory firm Conway MacKenzie. Over 200 outlet centers are scattered across the U.S., compared with close to 1,200 regional and superregional malls.

One reason for the stronger performance of outlet centers, Leach says, is that they’re not weighed down by sagging anchors like J.C. Penney, Macy’s and Sears. Rather, outlet centers enjoy a relatively balanced mix of retailers, and they’ve largely escaped the recent spate of store bankruptcies and shutdowns—even though a fair number of outlet tenants compete in the battered apparel sector.

Even if outlet centers do lose tenants, backfilling the vacated space is easier because none of those tenants serve as anchors, Leach adds.

Another reason for the upbeat outlook for outlet centers, she says, is that they offer bargains. A study published in 2015 by researchers at Northwestern University and the University of Texas at Dallas found outlet stores sell similar, but lower-quality, apparel versus what’s available at traditional stores at an average discount of 40 percent.

“People are still budget-conscious and don’t like high price tags,” Leach says. “Outlet shopping offers consumers the opportunity to shop for goods at discounted rates. Those shoppers are loyal customers and will shop at their favorite outlet store more frequently.”

While e-commerce in general and Amazon in particular threaten brick-and-mortar retail, Leach believes outlet centers “can hold their own” thanks to low prices.

“When going to the outlets, shoppers automatically have the perception they are getting a good deal,” she says. “Outlet shopping offers the treasure-hunting experience, and the thrill of a deal will keep customers coming back.”

To read the entire article, click here.