Publicly owned luxury brands are heading to outlet centers to reach new customers and to liquidate excess inventory in a way that protects their images, according to Pam Danziger, who studies affluent U.S. consumers and founded Unity Marketing to help brands reach them. Offloading surplus inventory to discounters that might sell them alongside cheaper brands wouldn’t work for these brands, she noted.

Outlet shopping is tilting farther upscale than ever at Simon’s 150-acre Woodbury Common Premium Outlets. The landlord revealed sketches of a multimilliondollar a VIP Suite for luxury shoppers, many of whom travel from New York City, 50 miles south, for deals on designer labels. The VIP Suite will provide members of the Simon VIP Shopper Club with private dressing rooms, an upscale lounge with plush furnishings and curated art and a kitchen. The VIP Suite will host private events and will offer personalized service and curated customer experiences. The suite will open this year in Woodbury Common’s luxury wing.

Luxury business is booming at the outlet center. Twenty high-end tenants opened stores or expanded existing ones there in 2023. More than 20 plan to debut there in 2024 — including David Yurman, Roberto Cavalli, Maison Margiela and Jil Sander — and brands like Tory Burch, Marc Jacobs and Golden Goose are growing their stores at the center in 2024.

Woodbury Common’s fourth-quarter 2023 sales hit $375 million, and the property generates about $1.2 billion in sales annually, according to Simon. The owner plans to spend several hundred million dollars to add 155,000 square feet of stores and restaurants, a 200-key luxury hotel and a second parking facility. It will be the property’s fourth expansion since it opened in 1985.

U.K.-based Value Retail, which has 11 upscale outlet centers across Asia and Europe, also is courting the New York City luxury customer. Its first U.S. outpost, the 340,000-square-foot Belmont Park Village will open in September in Long Island’s Elmont, New York. It will sit in a complex with the famed Belmont Park racetrack and the new UBS Arena, home of the NHL’s Islanders. Value Retail has not named tenants, but its properties in Europe and Asia include names like Armani, Burberry and Givenchy.

And at Tanger outlet centers, short-term leasing deals with upscale retailers have turned into long-term leases over the past couple of quarters, according to president and CEO Stephen Yalof. High-end operators like Hugo Boss, Tory Burch and Ugg have done pop-ups at some Tanger centers, he said. “Based on the successes that they’ve had, we’ve converted them to long-term leases and obviously at significantly better margins.”

Luxury Beyond Outlet Centers

Bal Harbour Shops Pop Up as an Entire Shopping Center
High Street Investment in Vogue
Easton Town Center Has Created a Formal Fashion District