Executive Vice President & Chief Operating Officer, TANGER INC
Tanger CEO on consumer spending, retail theft and best retail sectors
Tanger CEO Stephen Yalof joins 'Money Movers' to discuss consumer spending trends, building shopping centers, and where he ...
About Leslie Gallardo
Leslie Gallardo, as Executive Vice President and Chief Operating Officer at Tanger, has been involved in the company's recent strategic shifts, as described by CEO Stephen Yalof in September 2024 interviews. Yalof stated that Tanger has been "reinventing" its centers by adding more food, entertainment, and other uses to attract customers, and has been focusing on "merchandising more to a local customer" rather than relying solely on tourists. He noted that the company acquired a shopping center in Huntsville, Alabama, and built a new one in Nashville, Tennessee, citing population growth in the "Southern corridor." Yalof described the outlet consumer as an "aspirational" customer seeking value, and said Tanger is working to attract a younger demographic by adding brands like Sephora, which he said would be the first in an outlet environment. He also mentioned that apparel categories, including athleisure brands like Athleta and Vuori, have been performing well, and that the company has increased "conspicuous security" in response to retail theft in certain geographies.
Transcript (17 segments)
N
Narrator0:00
Growth this year. Worth noting this would be below the historical pre-COVID average of 3.6%.
I
Interviewer0:05
Joining us at Post Nine is Tanger CEO Stephen Yalof. I love talking to you because we get a real-time indication of what consumers are doing. What are you seeing?
S
Stephen Yalof0:20
They are coming back, which is great. We had a great selling season. January across the board was pretty soft against all categories. February started to see the customer coming back, but March has been great indications, and we're optimistic for Easter selling season and into spring.
I
Interviewer0:34
It really matches — in January we got a retail sales report that was ugly. We thought the weather. In February was better, but not great, so it sounds like that jibes with what you're seeing and it's a pickup in March?
S
Stephen Yalof0:51
Yes.
I
Interviewer0:52
Higher ticket prices, people are more confident?
S
Stephen Yalof0:56
People want to get out and enjoy — what we've done in the past year, 18 months, we reinvented our centers. Where it was typical power shopping experience in the outlets, particularly, we've gone after more food, more entertainment, different uses in the center so people have more reasons to come, and we're seeing them come. Our dwell times are getting longer. Our customer visits, repeat customer visit is happening more frequently. I think there's a suburbanization of America, and because of that our centers play right to the communities where a lot of people are moving or spending a lot more time.
I
Interviewer1:31
I was going to ask if that's actually creating new potential markets, just as these metro areas kind of expand out and you have people moving farther from city centers. Are you looking at that in terms of possible new locations?
S
Stephen Yalof1:44
Well, we are. We just bought a shopping center in Huntsville, Alabama. Huntsville, Alabama, is growing because a lot of people are moving to that geography. Tennessee, Nashville, Tennessee, one of the fastest growing cities in the country right now. We just built a new shopping center in Nashville as well. We're slightly outside city center, in the case of Nashville, 15 minutes. At least that's where the growth is going, in that southern corridor. We're seeing a lot of that traffic. We're merchandising to that traffic. We're merchandising more to a local customer where the outlet narrative used to be a lot more tourist driven. We see that tourist coming out of Nashville and shopping our center, but that local customer who's shopping far more frequently, staying longer when they're there and obviously spending a lot more money.
I
Interviewer2:26
Which categories are hot and which ones are not? Some the retail data, beauty is still doing well but apparel not so much?
S
Stephen Yalof2:35
It's interesting. It depends on the apparel brand. We're seeing great growth with Gap. Gap reported their numbers and their international business was not as good as their U.S. business. And we see a lot of trends in our U.S. business as well. In fact, in the past month, Gap business has been very strong. I see a lot of positive things coming out of the new creative director, Zac Posen just joined the company. We feel good about Richard Dixon as the CEO of that company. We've got a lot of Gap stores across our entire portfolio.
I
Interviewer3:06
One of your biggest tenants?
S
Stephen Yalof3:08
Yes. Because of that, we're big fans of Gap. They've done a wonderful job, particularly in the outlets and differentiating product. And we see a lot of customers coming to shop those brands. And staying for our other brands in the center.
I
Interviewer3:21
We have Lulu and Nike reporting after the bell. Any insight?
S
Stephen Yalof3:26
I don't want to speak for either of those brands right now. Let's just say that athleisure has been a great category and a great leader for us. We recently have done deals with Athletica and Vuori. We have a number of other athleisure brands that have full brick and mortar stores now looking to join the outlet space.
I
Interviewer3:51
Is theft an issue for you? Five Below surprised the market today after Target told us that they were kind of at the peak for theft. Is that getting worse or getting better?
S
Stephen Yalof4:02
First of all, I think there are certain geographies where theft is worse. For us it's our responsibility. We have security is really important to us. In fact, the new narrative on security is more conspicuous security as opposed to inconspicuous security. I think it makes the customer feel better when