Norfolk outlets: Same designer goods, no tunnel headache

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A rendering of Norfolk Premium Outlets, scheduled to open on June 29. "We've got a lot of interest in the site," said Les Morris, director of corporate P.R. for Simon Property Group. (Courtesy Simon Property Group)
A rendering of Norfolk Premium Outlets, scheduled to open on June 29. “We’ve got a lot of interest in the site,” said Les Morris, director of corporate P.R. for Simon Property Group. (Courtesy Simon Property Group)

Come July 4, Southside residents like Nicole Wilkens will have something new to celebrate. They won’t have to drive to Williamsburg to go outlet shopping.

The Southside’s first outlet mall, Norfolk Premium Outlets, is scheduled to open June 29 with 332,000 square feet of space at the intersection of I-64 and Northampton Boulevard.

About a tenth of roughly 85 planned stores have been revealed so far, and the developer, Indianapolis-based Simon Property Group, expects to unveil more names later this month, Director of Corporate Public Relations Les Morris said in a recent interview.

The lineup includes nine outlets, all of which are already at Simon’s Williamsburg Premium Outlets: Under Armour, Tommy Hilfiger, Banana Republic Factory Store, Calvin Klein, Columbia Sportswear, Kay Jewelers Outlet, Levi’s Outlet, Converse and Zales.

“I’m excited to see what else is going to be there,” said Wilkens, a Virginia Beach native who blogs about individual fashion and style at theeverydayrunway.com. “To have it in our backyard is simply convenient.”

Economic development

Norfolk Premium Outlets come to the Southside amid an expansion push by the developer, which develops, owns and operates real estate and malls, including 67 outlet malls to date and centers such as Potomac Mills in Woodbridge.

Simon opened a total of five “Premium Outlet” centers in 2016 and 2015, according to its 2016 10-K, an annual report filed with the Securities and Exchange Commission. The new locations were in Tampa, Tucson, Columbus, Ohio, Gloucester, N.J. and Clarksburg, Md., which is outside of Washington, D.C.

The Norfolk outlet center will launch amid the city’s revitalization, including the planned arrival of an IKEA store in 2018.

“It seems like things are really jumping there in terms of the market,” said Morris. “The excitement is just off the charts.”

Tourism data posted on Simon’s website bears this out.

Williamsburg and Virginia Beach have been the centers of regional tourism, a property fact sheet says, but the Southside tourism market is three times the size of Williamsburg’s. Colonial Williamsburg and the Historic Triangle attract four million visitors annually, according to Simon’s fact sheet, while Virginia Beach and Norfolk combined draw almost 13 million yearly visitors from areas such as Washington, D.C., New York City, Richmond, Philadelphia and Quebec, according to the fact sheet. And, the fact sheet adds, more than a third of Southside visitors have average household incomes greater than $100,000.

The new center will also serve the area’s military population and have a positive economic impact, according to Morris. The project has supported roughly 500 construction jobs, and will lead to an additional 800 full- and part-time jobs once the mall is completed, he said.

The Norfolk Department of Development was not available to comment for this story.

A Virginia Beach tourism official, however, hailed Norfolk’s outlet mall as a boost for the area.

“We support anything that encourages visitation and regionalism,” said Teresa Diaz, public relations specialist for the Virginia Beach Convention and Visitors Bureau. “We’re all about it.”

Williamsburg loses its exclusive

Norfolk Premium Outlets will add to develop Simon Property Group's portfolio of 67 outlet centers, including one located roughly 45 miles away in Williamsburg. (Courtesy Simon Property Group)
Norfolk Premium Outlets will add to developer Simon Property Group’s portfolio of 67 outlet centers, including one located roughly 45 miles away in Williamsburg. (Courtesy Simon Property Group)

Still, the Southside’s gain means Williamsburg, long an outlet destination, will face more competition. For the first time, a center by the same developer, featuring some and perhaps even many of the same stores, will be roughly 45 miles away.

When asked about Norfolk’s potential impact on Williamsburg’s outlet center, Morris said Simon would not have gone forward in Norfolk at the risk of damaging its Williamsburg property.

“We know what we’re doing,” he said. “We know our portfolio obviously better than anyone.”

A retail-strategy expert echoes this view

“My guess is they’ve done a million studies,” said Lawrence Ring, professor of marketing at the College of William & Mary’s Raymond A. Mason School of Business.

Norfolk’s outlet mall will likely do well, he added, even if it has many of the same stores as Williamsburg, because Simon attracts wanted brands.

A state tourism official offers a similar take.

“Everybody is competing for tourism dollars,” said Esra Calvert, director of research for Virginia Tourism Corporation. “Sometimes competition is a good thing.”

Possible downside: enclosed malls

But a Southside marketing professor points to a potential downside.

Previously, outlets were located in out-of-the-way places and attracted bargain hunters, while enclosed malls targeted more affluent customers, said Chuanyi Tang, an assistant professor of marketing at Old Dominion University’s Strome College of Business. Now, outlet malls are locating in urban areas and offering a more upscale mix of entertainment and dining.

“Basically, they are competing with each other,” Tang said, referring to outlet malls and enclosed malls. “So local competition between the retailers, I think, will become fierce.”

Wilkens, though, will be watching. She’s curious about whether Coach or Kate Spade, one of her favorite Williamsburg outlet shops, will open in Norfolk.

“That would be great, because I wouldn’t have to travel an hour to get there,” she said.