As the recession drags on, one of the biggest causalities of tighter pockets have been local shopping malls. TIME reports that one out of every 11 malls is now empty, with vendors unable to keep their shutters up. And yet, despite the quiet four story malls, turns out Americans are spending money, just elsewhere.

A recent report from market research group NPD Group said that sales figures demonstrated the “new ‘value-centric’ consumer mindset,” with apparel sales up 17.9% over the last year at factory outlets, compared to a rise of just 2.5% at department stores.


So why the shift to outlet malls? Even when you consider that factory outlets often have discount on products, outlet shopping is often just as profitable for retailers as being in a mall. Rent charges in local malls are historically higher given their central location and the ability to be in close proximity to other stores.

The Chicago Tribune explored the pros of the business model of factory outlets:

The malls are typically on one level and outdoors, so rents are cheap. The common area assessments are also low compared with traditional malls, since there are no elevators or escalators, no heat or air conditioning and generally fewer frills in the mall. The stores themselves are bare-bones.

Still while factory outlets may have better deals, shoppers often complain they don’t have better quality. One Los Angeles Times article addressed the discrepancy saying:

“In today’s world, the outlet business is a business upon itself. The average consumer cannot tell the difference between a golf shirt made for an outlet center compared to one made for a full-line retail store,” [NPD analyst Marshal] Cohen said. “The difference mainly is cosmetic — you’d see a little less embroidering or a little less detail.”

I remember the good old days of taking road trips to go outlet shopping with the girls and returning home with a metaphorical mixed bag. While the slashed prices and change in scenery was nice, eventually our trips became less frequent as we decided to go with local designer discount stores like Loehmann’s and Century21 instead. Still, all this talk of outlet malls has me thinking an end of summer trip to the outlets might be in order after all.

What do you think of Americans flocking to factory outlets? Are they worthy of the hype or are there better options? Let’s discuss Clutchettes- tell us what you think!

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