In last week’s Anchor, we noted how outlet malls, a darling during the pandemic due to their open-air setup, were starting to see some headwinds in the past few months. During COVID, savings were up, gas was more affordable, and being outdoors was at a premium, so many outlets reaped the benefits to the detriment of their indoor counterparts. However, 2022 started to tell a different tale. Placer.ai’s outlet mall index indicates that starting around March 2022, outlet traffic began to lag that of the overall retail industry. There were two exceptions, namely back-to-school and the holidays, when shoppers were likely enthusiastic about buying in volume and felt the trade off in gas price was worth it for the outlet savings, but for the rest of the year, traffic to outlets was down compared to the overall retail industry. Recent outlet mall visitation trends were also likely impacted by high level of inventory clearance taking place at Kohl's, Target, and other retailers.
We also looked at a cross-section of outlet retailers ranging from shoes, apparel, underwear, and outerwear. Nike Factory Store is by far the juggernaut, with large spikes at Back-to-School, Thanksgiving, and Christmas. Shoes seem to be a popular item to shop for, as Skechers Factory Outlet comes in next in this group.
Compared to last year, The North Face Outlet is on fire. Recall that last year, Jan 2022, had an Omicron surge keeping many at home, so this year’s Jan 2023 shoppers are back with a vengeance and up a whopping 47% YoY. There have also been some extreme weather patterns, leading to a need for new outerwear. J.Crew Factory is posting lower traffic results vis-a-vis the same time period last year, although Jan ‘23 was up due to the Omicron comparison. Bloomingdale’s Outlet had comparatively stronger footfall from Jan-May of 2022, but since then has lagged in comparison. For Calvin Klein, numbers were stronger in Feb 2022, but the rest of the year since has been down. DKNY Company Store has been a mixed bag. It started off strong in Jan/Feb ‘22, saw a decline thereafter, but has been bouncing back since Oct ‘22 til now.