Simon's Toronto Premium Outlets Now Brings In Luxury Line-Up
Zacks Investment Research | Nov 16, 2018 12:21AM ET
Retail REIT Simon Property Group, Inc. (NYSE:SPG) is aiming at premium acquisitions and transformative redevelopments. Most recently, the company announced that Toronto Premium Outlets, the company’s joint venture with SmartCentres, has unveiled a robust line-up of luxury brands for its 140,000-square-foot expansion.
More than 40 stores will be added to this retail destination in Halton Hills, Ontario, because of the expansion, with majority already announcing official launch, and others joining before year end. The move is a strategic fit as it will help Simon Property leverage on the improving spending habits of wealthier customers amid strengthening economy.
One of two Simon Premium Outlets Centers in Canada, the Toronto Premium Outlets lures millions of shoppers each year. It has more than 500,000 square feet of retail space that house nearly 130 designer outlets.
Specifically, per the company’s press release, Gucci, Montblanc, Prada and Zadig et Voltaire are joining reputed brands like Burberry, Hugo Boss, Jimmy Choo, Stuart Weitzman, and Ted Baker. In addition, as part of the extension, Canadian retailer, Aritzia, opened its first outlet in North America. These apart, the existing ones, like Under Armour (NYSE:UAA) , Rudsak and Jimmy Choo, have also refurbished or expanded in this retail center.
Besides adding a line-up of luxury brands, this shopping destination has improved its amenities, as well as increased the food offerings by introducing Toronto Premium Outlets' first full-service restaurant, Madisons Restaurant and Bar, situated across Starbucks (NASDAQ:SBUX) on the northwest side of the center. Also, new fast casual and grab-and-go offerings, such as Cultures, Cacao 70, A&W, Real Fruit Bubble Tea and DAVIDsTEA (NASDAQ:DTEA) , will be joining the tenant roster.
Furthermore, there have been installations of seven new touch-screen directories for helping customers find their favorite stores, while other improvements, include mobile-phone charging stations, a second Guest Services Centre, an additional children's play area and a refreshed food pavilion.
At a time when mall traffic continues to dwindle amid e-commerce boom, with store closures and retailer bankruptcies affecting retail landlords, Simon Property is making immense efforts to boost the value of its retail properties through refurbishments.
Ultimately, the aim is to transform retail shopping centers in a way such that these spaces appear as a one-stop destination where people can not only shop, but also entertain and socialize. Eventually, such measures will likely help boost traffic and drive sales. Nevertheless, implementation of such measures requires a decent upfront cost and therefore, would limit any robust growth in its near-term profit margin.
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Simon Property currently has a Zacks Rank #3 (Hold). The company’s shares have appreciated 3.2% in the past three months as against its Zacks Investment Research
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