Creative Outlets

Luxury retailers are fast-tracking expansion of their outlet concepts. And it’s not just a recessionary reflex that’s driving growth. “Outlets are becoming brands in themselves with a distinct customer,” says Robert Wallstrom, president of Saks Fifth Avenue Off 5th, which will open at least three stores this year.

Similarly, eight Nordstrom Racks will make their debut, Neiman Marcus plans three new Last Call centers, and Macy’s is considering joining the outlet sector, as well.

Bright and uncluttered, Saks Fifth Avenue Off 5th’s new “luxury in a loft” features a fresh layout that meets the expectations of customers who want stores to be fun and easy. It also integrates the outlets into lifestyle-oriented shopping centers that are adding a more dynamic tenant mix of trendy restaurants and entertainment venues.

Like rival Nordstrom Rack, Saks’ outlets now leverage the high-profile name of their luxe sister department stores. Over the last year, the existing 48 Off 5th stores added the Saks Fifth Avenue name to their marquees.

Signage, colors and finishes all reference the mother brand’s New York heritage, but this is no knock-off. Wallstrom estimates that less than 10 percent of his division’s shoppers overlap with the core brand’s market. Marketing to their customers’ quality-for-value profile, Saks Fifth Avenue Off 5th broadened its product lines, widened the aisles and created visuals that display product more prominently.

But what happens when the recession’s over and it’s a material world once again? “Outlet shoppers are here to stay,” says Wallstrom. “They shopped with us before these challenging economic times and will continue to shop with us in the future.”