TORONTO — Canada’s largest retail landlord says its new partnership with an American outlet mall chain will mean Canadians won’t have to travel to the U.S. anymore to score a designer purse at outlet store prices.
RioCan Real Estate Investment Trust (TSX:REI.UN), says consumers will benefit from lower prices when it teams up with American Tanger Factory Outlet Centers, of Greensboro, N.C., in a plan to develop 10 to 15 outlet shopping centres across Canada in the next five to seven years.
The properties would be branded as Tanger Outlet Centers, and RioCan said Monday they would provide “U.S.-style” shopping options that include “factory stores,” which sell a store’s own prior-season merchandise for less than full retail prices.
“(It means) more choice within Canada, that would be the biggest thing, and really not having to wait until you go to the United States to visit an outlet mall and buy some really well-priced, first-line merchandise,” Edward Sonshine, president and CEO of RioCan said in an interview.
Tanger will be in charge of leasing and marketing services, while RioCan will handle property management. The two will each own a 50 per cent stake in the properties, which will be likely be located in suburban areas near Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver, Sonshine said.
Tanger currently runs 33 outlet malls in 22 American states that draw 150 million shoppers each year, according to the company’s website.
Tanger outlet centres — comprised of suburban outdoor stores located side-by-side in a city street format —have a wide variety of major tenants, including luxury leather goods retailer Coach, high-end fashion retailer Polo Ralph Lauren and gourmet food store Harry and David. They are also home to retailers with lower price points, including Old Navy, women’s clothing retailer Dressbarn, and Pepperidge Farms foods.
“We’re constantly prospecting among those American tenants and what we kept hearing from them was: ’We’d like to come to Canada, but we’d like to come with the outlet format,”’ said Sonshine, who added that tenants like Nike, Adidas, Michelle Obama favourite J. Crew, Pottery Barn, men’s clothing brand Van Heusen and Kenneth Cole have all told Tanger they are interested in opening factory outlet stores in Canada.
Tanger did not return calls Monday, but Steven Tanger, the company’s president and CEO said in a statement that “Tanger’s top retail partners are looking for growth in the Canadian market and it is our intent to provide them with the outlet shopping centre sites to meet their needs.”
Outlet malls are big business in the U.S., with Consumer Reports magazine estimating up to 55 million Americans travelled at least 320 kilometres round-trip to snap up designer goods at discount prices at an outlet mall in 2001, the most recent year for which statistics were available
RioCan has ownership interest in 296 retail properties, including 10 under development. It also has a 14 per cent equity interest in Cedar Shopping Centers, Inc., which operates in the U.S. Northeast.
The closest Tanger Outlets to the Canadian border are located about an hours drive north of Windsor, Ont. in Howell, Mich., and four hours south of Montreal in Tilton, N.H.
This is the second time this month a major player in the U.S. retail industry has announced expansion plans in Canada.
RioCan — Canada’s largest landlord to Zellers stores — said this month it hopes to land several Target stores as tenants when the American discount retailer enters Canada over the next few years.
Discount-chic retailer Target Corp., which is known for offering capsule clothing collections by high-end designers at affordable prices, announced it will spend $1.8-billion to acquire the leases on more than 200 Zellers stores from the Hudson’s Bay Co.