Simon Property CEO intends to create new sales events as inflation rises – Low Calorie Diets Tips

David Simon, Chairman and Chief Executive Officer of Simon Property Group

Patrick T Fallon | Bloomberg | Getty Images

David Simon, CEO of the country’s largest mall owner, wants to create a new kind of annual shopping extravaganza as consumers increasingly feel inflation almost everywhere they go.

Think Amazon Prime Day but for retail centers.

Dubbed “National Outlet Shopping Day” by Simon Property Group, this event is for people looking for deep discounts on everything from new clothes and sneakers to sunglasses and luggage, Simon said in a recent Zoom -Interview with CNBC.

The first iteration runs this weekend at the property owner’s 90 premium Mills-branded outlets and outlet properties across the United States. About 300 retailers from J.Crew to Banana Republic to Puma will participate by offering deals exclusively at those locations, according to Simon’s property. In this way, the mall owner works with its tenants to lure insolvent consumers to shop as budgets tighten and retailers become more competitive for shoppers’ money.

Retailers from Target to Gap have seen their inventories explode as backorders arrive from overseas, while consumers shift spending away from so-called pandemic categories like sweatpants and office furniture.

CNBC spoke to Simon and Gary Duncan, President of Simon Property’s Premium Outlets and its Mills business, and Mikael Thygesen, Chief Marketing Officer, about this weekend’s event, the state of the retail industry and American consumers.

The following conversation has been edited down for clarity and brevity.

Simon Property Group’s Sawgrass Mills Outlet Center in Sunrise, Florida.

Source: Simon Property Group

Why did Simon Property Group create this shopping holiday and decide to run it this weekend?

Simon: The idea was in the works at the beginning of 2019. And then we couldn’t put everything together. We wanted to do it in 2020 and Covid thwarted our plan. So that’s what we’ve always wanted to do.

The genesis was really to give back to the consumer in terms of our promotions and offers. But the Simon Outlets also have great brands to back you up. And we want them to be remembered. We will do this annually – and given inflationary pressures, this could not come at a better time.

Thygesen: We put it in between the traditional ad windows so Memorial Day is over and back to school hasn’t started yet.

How was the reception of your retail tenants to participate with discounts and other incentives to entice people to shop?

Simon: We have 300 retailers but I hope to have 1,000 next year. We want to build on that every year. And of course it’s our day, but we welcome the participation of any outlet owner who wishes to participate.

How have your outlet centers performed compared to the Simon Property Group shopping centers of the same name, especially against the backdrop of red-hot inflation and with more and more consumers looking for savings?

Simon: We are very, very happy with our full price deal. Our outlet business has been extremely stable and is also growing. We have branches in key tourist markets — Desert Hills, Sawgrass Mills — and we’re seeing them breaking records [sales] again because we see more than just domestic tourism coming back. I’m starting to see international tourism coming back.

Honestly, I think the US is where the action is. We have a lot of great things going on in this country. I think you’ll see sourcing come back. Look at Intel, their commitment. Tesla. They go down the list, less reliance on China. And we’re seeing that with international retailers who want to grow in the US and say that’s a better place.

We’re seeing a lot of retailers just figuring out how to manage extra inventory. Do you see any of them looking to outsource these goods through their outlet stores?

Duncan: What we saw early in the year and even for most of 2021 was that tenants didn’t have enough products due to supply chain issues coming in from Asia – certainly in the apparel and footwear categories. And that has largely been eliminated.

Now people are spending, but they’re careful about where they’re spending and they want their money to keep flowing. The points of sale will continue to be a very valuable resource for them and for us. But we haven’t heard of retailers having a major inventory glut. We’re doing some pop-up stores with specific people who have this problem, but I don’t see it being widespread.

Simon: I echo what Gary says: It’s really selective here and there. And there are more bets on what’s going on now. You see it from many mall retailers when you are [in the business of] Dress up, jewelry and the event stuff, you’re really good at it. Remember when we thought the early 2020s would be about going out with friends? It didn’t quite happen. It’s happening this year.

When retailers have a little excess inventory — because, as Gary said, the consumer is a little more cautious — it’s actually good for the outlet business. We’ll see if that really leaks out, but it wasn’t widespread by any means.

What other changing consumer behaviors are you seeing?

Simon: We’re very sensitive to what consumers are going through, so we want to figure out how we can boost their dollars. There is also a shift towards dressing up. We’re seeing really good demand on that front.

Obviously, the higher-income consumer has not changed their behavior. Those on low incomes are under pressure and that’s what we’re focusing on. This consumer is of concern and we are trying to figure out how we can help.

Leave a Comment