Neiman Marcus, Nordstrom, Bloomingdales and Saks increase outlets

By Kyle Stock - July 16, 2013 Bloomberg Business Week

High-end department stores are slumming … sort of.

At pricey apparel retailers such as Neiman Marcus and Bloomingdales (M), outlet stores may soon outnumber traditional locations, according to a new report by Bloomberg Industries. In fact, they already do at Saks (SKS) and Nordstrom (JWN). Some 60 percent of Saks locations are now outlets, and all but two of the 15 stores it plans to open in the next two years will be discount centers. Nordstrom meanwhile, has 127 “Rack” outlets and plans to open another 17 by the end of the year..

The strategy is a simple play for the bargain-hunters who have driven handsome returns for Ross Stores and TJ Maxx of TJX Companies (TJX). “It’s predominantly an entirely different customer for these companies,” says Bloomberg Analyst Poonam Goyal. “They know they can’t afford the full-line stuff, but they still desire the brand.”

A steady stream of thrifty customers pays off in tight times. As the economy buckled in 2009, combined revenue at Ross and TJX swelled by 5 percent, while sales at Neiman Marcus, Nordstrom, and Saks slid by 10 percent.

“It really took the recession for them to see the opportunity there,” Goyal says.

Separating shoppers by willingness to pay—better known as price differentiation—has long been a proven business strategy. It’s tough for a mid-market player such as Macy’s, but it’s perfect for a company that focuses on pricier products.

The trick, however, is to make sure that people who are willing to pay the higher price can’t easily switch to the cheaper option. That’s the beauty of outlets; they physically separate buyers. They also let high-end brands offload stale inventory without slashing prices in flagship stores, conditioning affluent customers to wait for discounts.

The discount stores are often more profitable than the glitzier retail hubs. In terms of revenue per square foot, Nordstrom Rack locations sell 40 percent more than the company’s traditional locations, according to the Bloomberg analysis. And expenses are lower at outlets, whose shoppers generally don’t need to be enticed by a swarm of sales staff, or by expensive displays and fixtures.

“The only real danger for outlets,” Goyal says, “is if everyone suddenly wants to pay full price.”

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Bloomingdale's to open at Merrimack Premium Outlets

By DENIS PAISTE - New Hampshire Union Leader 

MANCHESTER — Corporate parent Macy’s Inc. said its Bloomingdale’s unit will open a 25,000-square-foot outlet store in Merrimack Premium Outlets this year.

The store will employ about 35 workers.

The Merrimack Premium Outlets, expected to open in June, have been steadily adding tenants with 22 permits issued and 15 pending from the town of Merrimack. Up to 100 stores are expected to join the mall.

Bloomingdale’s Outlet and Saks Fifth Avenue OFF 5TH will be the largest stores at 25,000 square feet to 28,000 square feet.

“A Bloomingdale’s Outlet exemplifies the quality level that we’re bringing to Merrimack,” said Michele Rothstein, spokeswoman for Simon Property Group’s Premium Outlets division.

“We’ve had a great experience with Bloomingdale’s to date,” she said, noting a unit opened in Wrentham, Mass., late last year.

Besides Merrimack, Bloomingdale’s outlets will open four other new stores as well as one new Bloomingdale’s store and one replacement in California, Macy’s said late Tuesday.

Macy’s also announced closings of four Bloomingdale’s stores and five Macy’s stores in states from Georgia and Maryland to Texas and Minnesota.

“This requires us to make some difficult decisions to close stores that no longer meet our performance requirements, as well as to open stores where we see opportunity,” Terry J. Lundgren, Macy’s chairman, president and chief executive officer, said in a statement.

Macy’s will offer transfers or severance benefits to affected employees.

When the planned openings and closings are complete, Macy’s will operate 804 stores in 45 states, the District of Columbia, Puerto Rico and Guam.

Macy’s said it will take a charge of $25 million to $30 million against earnings in the fourth quarter of 2011.

Bloomingdale's Outlet coming to Paragon Outlets Livermore Valley

by Around Dublin Team

 Paragon Outlet Partners, a retail real estate development firm headquartered in Baltimore, has just confirmed that Bloomingdale’s Outlet will anchor the new outlet mall currently under construction in Livermore, CA. Paragon Outlets Livermore Valley is expected to grand open by Black Friday 2012.

At Paragon Outlets Livermore Valley, a 543,000-square-foot shopping destination serving the greater San Francisco area, Bloomingdale’s Outlet will occupy a 25,000-square-foot anchor location. It will join a collection of more than 120 top designer and name brands such as Barney’s New York Outlet, Brooks Brothers Factory Store, Dooney & Bourke Factory Outlet, Elie Tahari, Etro, J.Crew, Michael Stars, Neiman Marcus Last Call, Saks Fifth Avenue OFF 5TH and St. John, among many more, when the outlet center opens in November.


“We are delighted Bloomingdale’s Outlet has chosen to open new outlet stores with Paragon Outlet Partners,” stated Principal Nicholas King. “We work to create well-tenanted shopping destinations where consumers have access to a world-class, robust mix of iconic brands. Welcoming our first set of Bloomingdale’s Outlet stores into our tenant roster is a true testament to our ongoing mission.”

Bloomingdale's Outlet coming to Paragon Outlets in Grand Prairie

By Scott Nishimura - Star Telegram

A major outlet center being built in Grand Prairie, scheduled to open this summer, got a boost with last week's confirmation that Bloomingdale's Outlet is coming in.

The 25,000-square-foot store will join more than 100 others, including Saks Fifth Avenue Off 5th, Brooks Brothers Factory Store, Coach, Tommy Hilfiger, Nike, Gap Outlet, and Banana Republic Factory Store, at the Paragon Outlets Grand Prairie. The 420,000-square-foot shopping center opens Aug. 17 at the northeast corner of Interstate 20 and Texas 360.

The Star-Telegram chewed over the project with Nicholas King, a principal in Paragon Outlets Partners, the Baltimore firm that's developing the center and owns other outlet centers in Livermore Valley, Calif., and Orlando, Fla.

How much of the space is leased right now?
In excess of 90 percent. We're putting the finishing touches on the tenant mix. We expect to open 100 percent occupied.

Any room in the development to grow beyond the 420,000 square feet?
We do have some additional land (the development has about 50 acres total), but we have no plans to expand the property at this time.

Who's the customer?
Our typical shopper is female, 35-55, typically with household incomes of $75,000, fashion-conscious, brand-aware. We target major metro areas. We thought the DFW market was under-retailed from an outlet perspective. We really like the demographics.

How far will this property draw from?
They can draw from up to 60 miles away, (but mostly from) a 30-40 mile radius.

Does it have the potential to draw tourists?
That was one of the things we looked at, with the proximity to Arlington, the stadiums, Six Flags.

Will this have a different customer than other outlet centers in the market?
I assume you're talking about Allen (Premium Outlets, north of Dallas) specifically. The DFW market is a large market. I think we're going to have some tenants that are unique to our center. Bloomingdale's is one of them. We think it will operate with little or no impact on the Allen center and draw from the south market.

What about Grapevine Mills as a competitor?
We see the Mills shopping experience and the outlet shopping experience as different. (The Mills experience) tends to be more of an entertainment-based trip. Ours is more of an a shopping-based trip.

What categories in the merchandise mix would you like to see get stronger?
We're down to our last 20,000 to 30,000 square feet. We're very happy with where we are merchandise-wise. We think we have a very good solid offering that will appeal to men and women, kids. With our last eight or nine spaces, we're trying to identify tenants that will set us apart.

What do these kinds of centers do in sales per square foot?
The outlet business has been great over the last decade. We've seen in this last economic downturn that the outlet centers have outperformed traditional retail. We would hope this center would perform in excess of $500 per square foot (compared with the industry average of $331). We certainly expect that would be the case.

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Read more here: http://www.star-telegram.com/2012/01/07/3641273/dfw-outlet-center-project-lands.html#storylink=cpy

Bloomindale's coming to Wrentham Village Premium Outlets

By Donna Goodison - Boston Herald

Bloomies fans will soon be able to shop without as much sticker shock.

Bloomingdale’s, The Outlet Store is set to debut at the Wrentham Village Premium Outlets on Oct. 26.

Launched last year, the new chain is the upscale Bloomingdale’s late-in-the-game answer to rivals Nordstrom Rack, Saks Fifth Avenue’s OFF 5TH and Neiman Marcus’ Last Call stores.

Senior president Arnie Orlick promises Bloomingdale’s brands at 35 percent to 70-plus percent off.

Shelves and racks will be lined with merchandise directly from Bloomingdale’s stores, manufacturers’ closeouts and overruns, and remakes of past season styles.

The 25,000-square-foot Wrentham location will be the Macy Inc. division’s sixth outlet and first in Massachusetts.

“The time was right to go after a new business that was growing on a national basis and that we know has become a reasonably profitable business,” Orlick said. “Every customer today wants good value, but I think they’re going to find our differentiator is a very nice shopping environment.”

The outlet stores are an extension of the Bloomingdale’s brand, with a higher-end look that more closely resembles a full-line store, he said.

The company also is looking at additional opportunities to open other outlets in Massachusetts, according to Orlick.

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• Bloomingdales opening four more outlet stores

Bloomingdales opening four more outlet stores

(KYTX) - Consumer Corner -Courtney Friedman

Department store chain Bloomingdales is expanding into more factory outlet malls.

The company opened four outlet stores last year and plans to open three new ones this fall in Florida, Massachusetts and Illinois.

Bloomingdales says the outlet business is growing and the company may open even more stores in the future.

Department Stores Continue To Expand Into Outlet Centers

Chief executives of high-end department stores are betting on off-price outlets to generate growth, even as they curb discounts at their main stores.

Luxury CEOs dislike heavily discounting their regular merchandise—it erodes profit margins and hurts cachet. But tony retailers can't rely solely on full-price shoppers for growth now because luxury spending remains muted.

So more executives are expanding their outlets, which let them sell to a wider range of customers without having to offer big discounts at regular stores. And they're stocking more outlet-only products, not just marked-down leftovers.

Bloomingdale's will open its first outlet store, in Woodbridge, Va., on Aug. 20 and three more by year end. Lord & Taylor opened its first outlet in February, in Elizabeth, N.J., and will open two more this year. In April, Neiman Marcus Group Inc. began testing a new outlet concept called Last Call Studio in Dallas that doesn't sell overstocked merchandise, just outlet-only products.

Saks Inc. has opened one new Off 5th outlet this year and plans three more by year end. It is remodeling two existing outlets as well. Saks isn't opening any full-price stores this year.

Nordstrom Inc. opened its first New York City Nordstrom Rack outlet in April, one of 17 that the retailer plans to open this year, up from 13 last year. It will open only three full-price stores this year.