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Simon Property CEO aims to create new sales event as inflation surges


Simon Property Group Chairman and Chief Executive Officer, David Simon

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David Simon, chief executive officer at the country’s largest mall owner, is looking to invent a unique type of annual shopping spree as customers are becoming more savvy. the pinch of inflationThey can be found almost everywhere.

Consider AmazonPrime Day for Retail Outlet Centers

The event is known as “National Outlet Shopping Day”. Simon Property GroupSimon explained to CNBC that ‘, is for those who are looking for deep discounts on all things, from shoes and new clothes, to luggage and sunglasses, to clothing and footwear, and he spoke about it in a Zoom interview.

Iteration one will take place this weekend at Mills’ 90 outlets, which are premium properties owned by real estate owners in the U.S. Banana RepublicSimon Property reports that Puma will participate by offering exclusive deals at these locations. This is one of the ways that the mall owner works with tenants to attract cash-strapped customers to its stores. As shoppers are less able to afford to shop, their budgets shrink and they are more affordable for them.

Retailers in TargetTo GapAs backlog merchandise comes from overseas, retailers have witnessed their stock levels rise. At the same time, consumers are switching their spending from pandemic items like sweatpants to office furniture.

CNBC talked with Simon as well as Gary Duncan (president of Simon Property’s Premium Outlets and Mills) and Mikael Thigesen (chief marketing officer) about this weekend’s event and the state of America’s retail industry.

This conversation has been reduced to keep it concise and clear.

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

Simon Property Group

Simon Property Group created this shopping vacation and decided to make it available over the weekend.

Simon:It was already in development in 2019! We couldn’t get the idea together. Covid ended our plans to make it happen in 2020. We’ve wanted this since childhood.

Our original idea was to offer special deals and promotions to consumers. Simon stores have strong brands. They should be at the forefront of our minds. We’re going to do this annually — and with some of the inflationary pressures this couldn’t come at a better time.

Thygesen:It’s been timed between traditional promotion windows so Memorial Day has ended and back-to school has not started.

How has it been received by your retail tenants when they offer discounts or other incentives to encourage people to shop at their stores?

Simon:We currently have 300 retailers. Next year, I would like to see 1,000. It is a goal to continue growing each year. We are open to participation by any outlet owner who wishes.

Your outlet centres have performed relative to Simon Property Group’s nameake shopping malls. This is especially against the backdrop of high inflation and consumers looking to save money.

Simon:The full-priced business has been very satisfying. The outlet business is growing steadily and has proven to be very stable. We have outlets that are in major tourist markets — Desert Hills, Sawgrass Mills — and we’re starting to see them reach record [sales]We see more domestic tourists returning to our country than we do in the past. I am beginning to see. international tourismCome back.

To be honest, the U.S. seems to have the most action. This country has a lot going for it. It’s likely that sourcing will return. Look at IntelTheir commitment. Tesla.The list goes down, and so does China’s dependence. We’re hearing this from international retailers who want to expand in the U.S., and believe this to be the best place to do so.

Many retailers are looking for ways to increase their inventory. Is anyone seeing them trying to outsource these goods?

Duncan: What we saw earlier in the year and even for the better part of 2021 was that tenants didn’t have enough product because they had supply chain issues that were coming from Asia — in the apparel and footwear categories, certainly. That has since been mostly eliminated.

While people spend, they are cautious about what they’re spending. They want their money to last longer. They will continue to find outlets to be an invaluable resource. However, we’ve not seen any reports about retailers selling too many inventory items. Some guys have this issue, so we are opening pop-ups. But it is not widespread.

Simon:Gary is right. You can also bet more on what is happening now. If you look closely, it’s easy to see from many mall stores. [in the business of]If you have all of the right accessories and dress to impress, then your doing really well. Did you remember when the 2020s would be a time for friends and going out? It didn’t quite happen. This year, it is.

If retailers have a little excess inventory — because as Gary said, the consumer is a little more cautious — that’s actually good for the outlet business. While we will see what happens, it’s not widespread.

Which other consumer behaviours are changing that you observe?

Simon:We are sensitive to the needs of our customers and want to help them. It’s also changing to be more stylish. That’s a great trend that we are seeing.

Evidently, higher income consumers haven’t altered their behaviour. We are focusing on the low-income consumers. This consumer is a concern and we are trying to find solutions.