A drop-off in profits among once popular teenage retailers doesn’t concern Steve Tanger, CEO and founder of Tanger Factory Outlet Centers, the largest owner of outlets in the U.S. He says those teenagers are just growing older and want better deals.
“Millenials are getting older and moving through that life cycle,” said Tanger. “Millennials today are basically 14 to 30 years old — but the bubble is probably 20. Four or five years ago, the bubble was 14-15 and now it’s moving through.”
Tanger added that the population of the United States is increasing by about 3 million people a year, so there will be no shortage of teenagers to take their place.
“There will always be teen retailers and the brand names may change, but there will be people that the (new generation) will find exciting,” said Tanger.
The New York Times recently published an article on how retailers such as American Eagle, Urban Outfitters and Abercrombie & Fitch are finding it harder to attract fickle teens and predict the next big trend in jeans.
The article cited a Thomson Reuters study, which predicted a 6.4 percent drop in sales at teenage apparel retailers, worse than any other retail category.
Tanger, speaking to the Savannah Morning News last month, said these teens and young adults are more interested in so-called “fast fashion” retailers who specialize in low-priced, trendy clothing.
Tanger’s latest venture is a joint partnership with Atlanta developer Ben Carter to bring 400,000 square feet of retail outlet space to Pooler, one of the fastest growing cities outside of Savannah. The shopping complex is expected to open in April 2015.
According to Tanger, his company has weathered the recession by focusing on value.
“We’re the place where they save the most money in brand-name products,” said Tanger. “So our business has held up extremely well, even through the great recession.”
Tanger Outlets’ fourth quarter report echoed the CEO’s statements. The company reported revenue of $107.4 million, a 13 percent increase over the previous year and a 98 percent occupancy rate.
“More and more people are going back to work,” added Tanger, “so they’re positive on the economy because they’re paying down their personal debt and their personal balance sheets are in better shape. ... And they have more disposable income to go shop.”
Tanger said his company’s goal is to provide shoppers with tenants who fit their lifestyle and budget.
“If fast fashion is where they want to shop, then we try to provide some of the fast fashion tenants like H&M and some of the others,” said Tanger.
H&M, a popular Swedish international clothing chain — sort of like the IKEA of fashion — has entered dozens of new markets in recent years. Is it possible Savannah might be getting one?
“I can’t mention anything until they’re signed,” said Tanger. “But we have several H&M stores. We have a great relationship with them, but I can’t go any further.”