Business

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

David Simon, President and CEO of Simon Property Group

Patrick T. Fallon | Bloomberg | beautiful pictures

David Simon, chief executive officer of the nation’s largest mall owner, wants to create a new kind of lavish, annual shopping as consumers increasingly feel restraint of inflation everywhere they go.

Think Amazon Prime Day, but for retail stores.

The event, known as “National Dealer Shopping Day” by Simon Property GroupSimon told CNBC in a recent Zoom interview.

The first iteration is happening this weekend at 90 property owner premium stores and Mills-branded retail stores in the U.S. About 300 retailers from J.Crew to Banana Republic Puma will join in by offering exclusive deals at those locations, according to Simon Property. It’s one way mall owners are working with their tenants to get cash-strapped consumers to shop as budgets are tight and retailers are more competitive for dollars. shopper’s dollars.

Retailers from Target arrive Distance have seen their inventory levels skyrocket as a backlog of goods arrives from abroad at the same time that consumers are shifting their spending away from so-called pandemic categories like sportswear and office furniture. room.

CNBC spoke with Simon, as well as Gary Duncan, president of Simon Property’s Premium Outlets and its Mills business unit, and Mikael Thygesen, chief marketing officer, about this weekend’s event, the state of the retail industry. and American consumers.

The dialogue below has been edited for clarity and brevity.

Simon Property Group’s Sawgrass Mills dealership in Sunrise, Florida.

Source: Simon Property Group

Why did Simon Property Group create this shopping holiday and decide to celebrate it this weekend?

Simon: The idea was done in early 2019. And then we couldn’t finish it all together. We were going to do it in 2020, and Covid killed our plans. So we’ve always wanted to do this.

The real origin is to give back to consumers about our special promotions and deals. But also to consolidate stores Simon has big brands. And we want them to always be at the forefront. We’ll be doing this every year – and with some inflationary pressures this couldn’t have come at a better time.

Thygesen: We’ve timed it between traditional happy hour slots, so Memorial Day is over and back-to-school hasn’t started yet.

How is the reception from your retail tenants to engage with discounts and other incentives to attract people to come and shop?

Simon: We have 300 retailers, but I hope next year we will have 1,000. We expect to build on it year after year. And obviously our day, but we welcome participation from any store owner who wants to participate.

How have your dealerships performed compared to Simon Property Group’s malls of the same name, especially in light of this red-hot inflation and with more and more consumers looking to save money? thrifty?

Simon: We are really, really satisfied with our full price business. Our store business is also very stable and growing. We have stores in major tourist markets – Desert Hills, Sawgrass Mills – and we’re starting to see them hit records. [sales] again because we see more than just domestic tourism coming back. I started to see International travel come back.

Honestly, I think America is where the action is. We have a lot of great things going on in this country. I think you will see sourcing again. Look at Inteltheir commitment. Tesla. You go down the list, less dependent on China. And we’re seeing this from international retailers that want to grow in the US and are saying this is a better place to stay.

We’re seeing a lot of retailers looking to manage more inventory right now. Do you see any of them looking to offload those goods through their storefront properties?

Duncan: What we saw earlier in the year and even better in 2021 is that tenants don’t have enough products because they have supply chain problems coming from Asia – definitely in the apparel industry. wear and shoes. And that has been largely eliminated.

Now, people are spending, but they are cautious about where they spend it and they want their money to go further. Stores will continue to be a very valuable resource for them and for us. But we haven’t heard anything about retailers having too much inventory. We’re doing some pop-up shops with some people having that problem, but I don’t find it common.

Simon: I’ll reinforce what Gary said: It’s really selective here and there. And it bets more on what’s happening now. You see it from many mall retailers if you [in the business of] Dress up, jewelry, and have things for the event, you’re doing great. Remember when we thought the early 2020s would be all about hanging out with friends? It didn’t quite happen. It is happening this year.

If retailers have a little excess inventory – because, as Gary said, consumers are a little more cautious – that’s really good for the retail store business. We’ll see if that really happens, but it’s not widely available anyway.

What other changing consumer behaviors are you observing?

Simon: We’re very sensitive to what consumers are going through, and so we wanted to figure out how to stretch their dollar. There was also a change in dress code. We’re seeing really good demand on that front.

Clearly, consumers with higher incomes have not changed their behavior. People on low incomes are under pressure, and that’s what we’re focusing on. That consumer is a concern and we’re trying to figure out how to help.

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