Shoppers Find a New Outlet (Center)

A few years ago, Simon said that Flemington, New Jersey’s Liberty Village outlet center was going to close for good. Judging by its high vacancy rate and the condition it had been in for years, this announcement came as no surprise.

The Simon in question is the Simon Property Group, a premier real estate investor and owner of malls and shopping centers in America. If you’ve got a big, modern premium outlet center near you, look closely at the sign and it might say “A Simon Center” under the name. In 2019, Simon Properties sold the iconic Liberty Village outlet center, opened in 1981, to a developer. The site is currently undergoing demolition and is expected to be developed as a townhome community.

This might seem like just another bit of coming and going in the commercial environment, but it marks the final end of what is considered the first outlet mall in the United States. And it also encapsulates the evolution of this particular retail segment over the decades, from quaint, cozy, somewhat informal centers filling a different segment than shopping malls, to much larger centers that closely resemble malls themselves.

Redefining ‘Outlets’

As first conceived, Liberty Village was a sort of colonial-reenactment shopping destination: Colonial Williamsburg with more commerce. There were people demonstrating colonial crafts dressed in appropriate attire—that sort of thing. (The first outlet centers emerged not that long after the nation’s bicentennial; perhaps the colonial mood was in the air.) In any case, however, it didn’t take too long for that to go by the wayside, and for most of its life, Liberty Village was simply an outlet mall that resembled a colonial village. In those days, outlets meant outlets: The stores specialized in things like last year’s products and factory seconds.

There’s an interesting little branch of retail that shares some of this conceptual DNA with classic outlet centers: the closeout stores like Ollie’s—which is still stocked with closeouts, buyouts and seconds—and Big Lots, which used to carry that kind of merchandise but now mostly carries its own house brands of discount merchandise. Even Walmart dabbled in this concept, using its own stream of returns or leftovers to stock a small, short-lived chain called Bud’s Discount City (even the buildings were mostly in-house secondhand—discarded older Walmart buildings!).

But “outlets” mostly ended up going the way of Big Lots, morphing from places to get imperfect or outdated brand-name merchandise at a discount to a set of parallel chains selling brand-new but inferior and discount-priced product lines. (It’s similar to how Reader’s Digest, as historian Daniel Boorstin noted in his 1962 book “The Image,” began publishing new content rather than condensed books.) The outlet companies will acknowledge this, but they don’t think there’s anything wrong with it: Change happens in every sector. “Sometimes, [retailers] tweak production of the items so they’re slightly different in terms of quality, but it’s acceptable. I don’t think this is a dirty little secret of the outlet industry,” said Coleen Conklin, senior vice president of marketing at Premium Outlets, a division of Simon Property Group.

That shift from “real” merchandise to actual outlet-grade product lines happened as outlet shopping became a bigger business. Today’s massive outlet malls—many of them Simon centers, like the ones in Jackson, New Jersey, Clarksburg, Maryland, and Leesburg, Virginia—are too large and too premium to be stocked with whatever deals turn out to be in the warehouses. It probably wasn’t possible to scale outlet shopping up this much and keep stores consistently stocked without regularizing and streamlining the product sources.

Obviously, this change has both a supply-side and demand-side element. In a world with revitalized actual towns and cities, big new outlet centers, big-box stores, fast fashion and e-commerce, the early iteration of outlet stores just doesn’t have the pull it used to have. On the other hand, the big new outlet malls are very popular, the merchandise is still cheaper than the main-line merchandise, and perhaps shoppers just like a deal and a place to shop and stroll.

Observing Generations

There are certain businesses where you can distinctly observe the “generations,” as we refer to iterations of electronic hardware. You can see it with supermarkets, ranging from early ~10,000 square foot neighborhood grocery stores to later midcentury 20,000-30,000 square foot supermarkets to modern giant supermarkets with gourmet offerings and massive prepared food sections. You can see it with all-you-can-eat Chinese buffets: There are a few old-school establishments out there, with a single steam table and Jello and chocolate pudding in big trays for dessert, but no grill or sushi. Then there are the newer ones with maybe four tables and a small sushi bar and hibachi station.

But the latest buffets tend to have as many as eight steam tables and very large “sushi bars” (consisting mostly of combinations and permutations of crabstick and avocado). You can also see certain “concepts” simply disappear. The salad bar/steakhouse format—the Sizzlers and Ponderosas—are nearly gone; the more upmarket but fundamentally similar Brazilian steakhouse chains like Fogo de Chão are growing (from one location in 1997 to 65 by 2024). As an overall retail segment develops, the previous iterations tend to fall by the wayside.

Outlet malls underwent a similar concept development like much of the retail and restaurant world over the past few decades, from quirky and small to large and luxe. The latest iteration of the outlet mall is much larger, more slick and sanitized and tightly managed. Instead of a couple of local cafes, there are food courts. Instead of a little information booth, there’s a full visitors’ center. There are large public plazas and outdoor seating areas, large bathrooms and, of course, massive parking lots to preserve the car-free nature of the retail area itself.

A raft of these early colonial-ish, Americana-themed, small-to-midsized outlet malls have all gone under. Check out the abandoned Santee Outlets in Santee, South Carolina, Darien Outlet Center in Darien, Georgia, and the demolished Perryville Outlets in Perryville, Maryland. Liberty Village may have pioneered this retail concept, but that didn’t save it from the same fate as many of its imitators.

But not all of those early outlet centers have gone dark. Aurora Farms Premium Outlets in Aurora, Ohio (also a Simon center), is an interesting case. Judging from the appearance of its two wings—one made up of small colonial-ish buildings around a pond, the other a strip-mall-style collection of stores in a long single structure—the center may have been expanded at some point. Today it’s not in the best shape, and it’s that original area around the pond that’s struggling. A plan to comprehensively renovate or rebuild that section never went forward. On Reddit, one person recalls the good old days: “They had some awesome stores there in the ’90s, like That’s Entertainment and What On Earth, which sold swords and shit. Very eclectic spread of stores.”

That’s my recollection of Liberty Village, along with the deathly-boring clothing stores my mother used to spend time in. There were quirky local stores too, and the place felt kind of organic, more like a second Main Street than a single shopping center or mall. Why hasn’t the Aurora center been closed down despite not quite thriving? Luck, or just enough profit to bother.

One example of something very much like a first-generation outlet mall is instructive. Peddler’s Village, a quaint, walkable, outdoor shopping complex with historic-looking buildings and an on-site flagship restaurant and inn, has been a major commercial attraction in Bucks County, Pennsylvania, for decades and remains so today. It’s basically at the same scale as Liberty Village, but it’s filled mostly with independent, locally owned shops, and the mix of businesses leans heavily in the direction of tasting rooms, specialty foods and decor/knickknack/houseware-type places. In other words, one-off shops you can’t find everywhere or replace with online shopping—places that reward physically visiting and browsing.

Right across from Peddler’s Village was an actual first-generation outlet center, Penn’s Purchase Factory Stores. Built in the 1990s, the property was deteriorating and mostly vacant by the mid-2010s. Part of the Penn’s Purchase property, on one side of the road, has been revived with a handful of tenants, similar to the mix in Peddler’s Village. But the larger piece of Penn’s Purchase on the other side of the road still sits mostly empty and falling apart.

Maybe Simon Doesn’t Say…

What this suggests is that even though Simon says no outlets for Flemington, Simon might not be pulling the strings. It might just be the case that Penn’s Purchase, Liberty Village and other incarnations of the first-generation outlet mall are obsolete as workable, profitable retail concepts.

Back in its thriving days, Liberty Village worked in tandem with Flemington’s old Main Street; people would stay a day or even a weekend in town, do their shopping, and eat or drink on Main Street and explore the historic town. But the new generations of outlet malls are towns unto themselves: places you can walk, shop, eat, rest and get fresh air, all without leaving.

Customers manifestly like these new outlet centers (I remember seeing cars parked out in the grass by the highway exit leading to the outlet center in Leesburg last Black Friday—that’s how much traffic the center generated!). The same stores, but fewer of them, in a less amenity-rich setting isn’t apparently what the market demands anymore, however much the smaller, more quaint centers might inspire nostalgia. If something like a Liberty Village is going to exist today, it likely has to offer something unique—not a reduced mix of chain stores, but local businesses that reward in-person shopping.

Simon Property Group is a real-estate investment trust, meaning that it’s an investor as well as a landlord. Perhaps there’s some profit to be had in keeping up these quaint first-gen centers that just isn’t enough for Simon to bother with. But there’s no question they no longer draw the traffic they used to, while the latest centers remain highly competitive. Maybe the customer mostly gets what they want, whatever Simon says.