Outlet malls still have plenty of growth potential

Outlet malls have been among the fastest-growing sectors of retail over the past several years. I argue (at RetailWire) that there is still plenty of upside, both geographically and strategically:

Outlet centers represent continued growth opportunity as long as their developers (such as Simon, which owns the Mills centers) rethink the tenant mix and shopping experience…and as long as the tenants themselves focus on new product development, not just clearance. It’s no different from the challenges facing any kind of shopping center; you can argue that regional malls are also “saturated” based on the growing numbers of so-called “zombie malls” in many cities.

Outlet malls have evolved far beyond their original appeal as clearance centers with “piperack” approaches to merchandising. Most centers today are a far cry from where they began. Gurnee Mills, between Chicago and Milwaukee, is a good example, having added a full-line Macy’s store last year. The outlet mall near Kenosha, just north of Gurnee MIlls, is consistently busy with customers lined up to get into the Coach store and other high-end stores.

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