Leslie Swanson, EVP and COO at Tanger Factory Outlet Centers, Inc. (NYSE: SKT), has more than three decades of experience in shopping center operations, management, and marketing. She joined Tanger in 2020 from Simon Property Group, Inc. (NYSE: SPG), and was promoted to her current role in December 2021.
What are some of the key factors driving occupancy for Tanger today?
Tanger’s occupancy level continues to remain strong, standing at 97% as of December 2022. Yet, even at this high level, we are finding meaningful growth opportunities. With approximately 10% of our gross leasing area (GLA) currently occupied by short-term, pop-up, or other temporary tenancy, we have the ability to drive additional rent growth over time as a portion of those convert to long-term leases.
Additionally, many of our key retailers have said they’re using the outlet space to clear excess inventory. Unlike larger discount stores, our centers allow retailers to retain control over their brand, merchandising, and pricing as they see fit.
Retailers also recognize that during inflationary times consumers are seeking to save money and may not be able to purchase items at regular price. Tanger’s centers allow shoppers to find their favorite brands at value pricing. Through our channel, retailers are also able to create brand affinity and loyalty for aspirational consumers that extends beyond the outlet space.
As a result, we’ve had tremendous success renewing space with retailers already in our centers. In fact, we’ve watched our post-COVID sales growth and disciplined space management drive opportunities with many of our retailers to increase their footprints.
Furthermore, we’ve made the diversification of our portfolio a primary part of our business strategy. We’re regularly elevating our offerings through the addition of new-to-platform brands and categories that recognize the importance of the value channel in their retail ecosystem.
Our leasing team has shifted its strategy to reflect this, prioritizing diversification and getting paid for the value we create. Last quarter we added nearly 30 new stores, including Serena & Lily, Casper, Huk, and Summersalt. This expansion into new retail categories not only gives us a wider pool of brands to pursue as partners, but also offers consumers significantly more options to expand their shopping experience at our centers.
Where do you see potential new revenue streams emerging?
If COVID taught us anything, it’s that human connection and in-person experiences really matter to consumers. We proudly welcome over 100 million customers to our centers every single year. Over the past few years, we’ve cultivated our media and marketing partnerships business, and I believe we’re in the early stages of scale and pricing power in this space. Our engaged audience is valuable for not just our retailers but for a variety of nationally respected brands including Tesla, Dove, and Heineken. Through increasingly relevant and compelling content, we’re continuing to achieve measurable results with several brands engaging in repeat campaigns.
In addition, we're strategically embedding sustainability into our operations with a return-on-investment mindset. We're reducing our carbon footprint at our centers while also reducing costs to improve our margins. Our consumers have welcomed our sustainability initiatives, and we've seen their direct impact on our business and community. Our partnership with Volta and EV charging, for example, is a “win-win-win” opportunity with embedded digital media opportunities.
We've also seen tremendous value in our loyalty program, TangerClub, which is beginning to deliver a strong return on investment. Capitalizing on members-only perks and points that lead to substantial savings, our loyalty members remain critical drivers of sales at our centers, and we're thrilled that our customers choose to tangibly invest in their relationship with Tanger and our retailers.
Lastly, we're planning to reimagine the traditional outlet mall design in our Nashville project, opening in September. Forgoing the "racetrack" design we have come to expect, Nashville will feel more like a village, with parking on the inside and shopping on the outside, surrounded by an activated community space that retailers can use. We're excited to introduce this new center, and its state-of-the-art layout, design, and first-class offerings, as a compelling revenue stream for years to come.
What are you most excited about in terms of Tanger’s focus on sustainability?
Tanger is committed to having a positive impact on the health of our planet and communities, as such we have placed environmental initiatives at the forefront of our business decisions. Last August, we announced a pledge to attain net-zero carbon emissions by 2050 and have already made great strides towards this goal.
We recently doubled our solar infrastructure, attained LEED Gold certification at 50% of our GLA, added over 160 new electric vehicle charging stations, and earned the WELL Health-Safety Rating for Facility Operations and Management in all U.S.-based centers.
While I’m incredibly proud of the progress we’ve made so far, I’m even more excited about the work still to come. Over the months and years ahead, I look forward to leading Tanger’s continued effort to create a safe and secure environment across its centers and strategically invest in clean energy to decarbonize, reduce costs, and increase efficiency.
What are the qualities of an effective COO, and what do you enjoy most about this job?
I am continually impressed and inspired by Tanger’s employees. Every one of them—whether in the field at one of our 36 centers or as a member of our corporate team—works hard to create an incredible shopping experience for our customers that truly embodies Tanger’s mission, vision, and values. As COO, it is my role to ensure that they, in turn, have an incredible professional experience.
I believe it’s imperative to approach this position with a people-first mindset. All our employees are working towards the same common goal of delivering the best value, experience, and opportunity for our communities, stakeholders, and partners, and we believe true success can only be achieved when it is experienced by employees, partners, and customers alike. We strive to create a culture of inclusion, where we can all be better—together. I work to ensure that any new operational procedure or initiative will have a positive impact on our employees—which leads to not only a stronger company culture but increases revenue and efficiencies across the organization.
Tanger has given me the opportunity to work in new ways across dynamic marketing and strategic leasing partnerships. I am passionate about our work to evolve Tanger from a real estate company to a customer experience company and am eager to continue being a part of the journey.