Tanger Factory Outlet Centers, which owns and operates 37 open-air outlet centers across the U.S. and Canada, said that traffic at its domestic centers returned to 99% of pre-pandemic levels in January.
“Our business continues to improve, with the consumer embracing open-air outlet centers as a preferred venue for shopping and entertainment,” said Stephen Yalof, CEO of Tanger Outlets in a statement. “Traffic was approximately 90% of prior-year levels during the fourth quarter and in January improved to more than 99% for domestic centers. Outlets are an important component of the omnichannel retail strategy, given the low cost structure and access to an incremental consumer that is both value-oriented and aspirational.”
It’s no secret that the COVID-19 pandemic has hit U.S. malls hard, with many operators struggling to stay afloat after months of rent delays and the bankruptcies of anchor retailers. Ongoing concerns around safety and the economy continue to dampen enthusiasm among consumers, with Coresight Research predicting that approximately 25% of U.S. malls could close over the next three to five years.
Mall owner Unibail-Rodamco-Westfield (URW) said earlier this month it was planning to “significantly reduce its financial exposure to the U.S.” in the near future, the latest chapter in an ongoing battle between executives and shareholders about how best to navigate the current crisis. URW already had sold three of its U.S. shopping centers — Meriden, Siesta Key and Sunrise — as part of a consolidation effort in 2020.
In contrast, Tanger Outlets enjoys two key advantages. The open-air format could allay some consumer safety concerns, and continued unease about the economy has consumers increasingly turning to discount and value channels, Tanger’s sweet spot.
Yalof said that rent collections at Tanger properties had improved to 95% of billed rents as of the end of January 2021, and that the organization already had collected 57% of 2020 rent that it allowed tenants to defer to 2021.