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Amid fluctuations with the larger economy, the global luxury sector is suffering a downcycle. After years of supercharged sales for designer goods, more customers are balking at the steep prices these retailers are asking, The Wall Street Journal reports.
But real estate investors, retailers and landlords are confident that the desire for luxury remains strong—as long as the prices are more reasonable.
While foot traffic remains below prepandemic levels, retailers are leasing more space at outlet shopping centers, where designers sell heavily discounted surplus or lower-quality items.
There are more than 200 outlet shopping centers in the U.S., many of which offer “affordable luxury” brands such as Coach and Marc Jacobs. Outlet landlord Tanger, which owns 38 properties in the U.S. and Canada, including Tanger Gonzales, was 97% occupied as of the third quarter, and its stock price has outperformed the S&P 500 since 2019.
