The role of the outlet mall
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The role of the outlet mall
Kai Ryssdal: So if everything’s on sale in the brick and mortar world, and more people are buying online or using apps to buy stuff without cash, what does that mean for the business of the retail business?
Malls. Like the one we’re in. Who better to answer that question than the guy who owns the mall we’re in, and others all over the country? Steven Craig runs Craig Realty.
I’d say welcome to the show, but technically we’re in your house, so thanks for having us.
Steven Craig: Thank you. We enjoy it.
Ryssdal: So how is the business of the retail business?
Craig: Well, ours is outstanding. We’ve had a tremendous holiday. You mentioned earlier, I heard the statistics you rattled of a record year — that really relates to like a 3 to 4 percent increase over last year’s number. Our November sales were up 46 percent as compared to last year. So, big difference.
Ryssdal: But the economy is still ‘meh’ at best.
Craig: Exactly.
Ryssdal: So explain how you’re doing so well.
Craig: Well, I think consumers haven’t lost a desire to gift or to give people presents. What they’ve lost is some of the purchasing power to buy those gifts. So what they’re doing is they’re looking at other alternatives. Everybody wants the brands, they love the brands — the Coaches, the Polos, the Guesses. If they can buy them at a better price somewhere, that’s what they’re doing.
Ryssdal: So whether discounts are 70 percent or 50 percent at the stores here at the Citadel, so long as stores are paying their rent, you’re fine with that, right?
Craig: We’re very happy about that.
Ryssdal: Not to be cold-hearted about it, but you’re OK with that. So here’s the thing: Those discounts generate foot traffic, which generates business for your customers, right? That’s what it’s all about?
Craig: Absolutely. And it obviously pertains well for other stores in the center, so if we’re bringing in a brand name like Coach who will do some ungodly number this year, the store next door is going to do even better.
Ryssdal: Right. So I’m sure in a secret spreadsheet you have some place back at corporate headquarters, you’ve got the next three to five years of this economy played out. Share it with us. Give us the secret.
Craig: You know, unfortunately I think we’re going to see a little bit more of the same. The private sector is what really dropped off in terms of job losses; now we’re starting to see the public sector cutting back to balance those budgets. That’s going to hold unemployment at a relatively high level. It’ll come down; it’s probably going to come down slowly, though. So I think you’re going to continue to see that consumer really trying to stretch the dollars they have.
Ryssdal: One more question, quickly: When residential real estate went kerflooey, everybody said commercial is next. And that never really happened. Do you believe commercial real estate is going to stick and you’re going to be all right?
Craig: I think certain sectors are in tough shape. There’s no question about it. I think the government helped it along, kind of kicked the can — to offer that expression — they kept the rates down, which is what enabled people to stay current with their mortgages. If rates start to move up, look for some big problems.
Ryssdal: Steven Craig from Craig Realty. Thanks very much for your time.
Craig: Thanks for having me.
Ryssdal: Appreciate you coming out.
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