Tanger Factory Outlet Centers Inc. is flexing with the times. 

“The client profile since COVID-[19] has completely modified,” said Stephen Yalof, president and chief executive officer, in an interview with WWD after the outlet center operator reported stronger first-quarter results.

“Loads of people have gotten a bit bit more online-savvy,” Yalof said. “That has actually worked to our advantage.”

Where people used to take more “window-shopping” trips, he said they are actually on a mission, having gone online to research the products they need and the stores they plan to go to. 

Yalof said traffic has grown slower than sales recently, but that sales productivity is up greater than 15 percent since 2019. 

“We’re producing more value on a per-unit basis than we had pre-COVID[-19],” he said.

Occupancy stood at 96.5 percent at the tip of the primary quarter on March 31 and average tenant sales for the past 12 months increased 0.4 percent to $447 a square foot.

That’s up from sales per square foot of lower than $400 before the pandemic. 

“Our customer, we wish to say, is aspirational — a consumer that wishes brands, they’re not in search of a commodity at the very best price,” Yalof said. “They’re not in search of sneakers for a dollar, they’re in search of their favorite brand, Nikes, for the very best price they’ll get, Ralph Lauren for the very best price they’ll get.”

Brands each have their very own goals within the outlet channel. Some wish to clear through excess inventory while maintaining their brand image.  

“The perfect method to control the positioning of your product and the worth of your product is to do it in an environment where you control all 4 partitions,” Yalof said. 

Others wish to bring more customers into their brand, to grab a few of those aspirational customers. 

It’s a multipronged approach that appears to be working for Tanger and its tenants, who recently have been willing to renew their leases with higher than 13 percent price increases, a figure the CEO said provides “validation that the channel is working.”

Investors looked as if it would agree and sent shares of Tanger up 6.9 percent to $19.61 on Friday, giving it a market capitalization of $2.1 billion. 

Tanger’s net income for the quarter increased to $23.3 million from $20.3 million a 12 months earlier. And funds from operations — a normal yardstick in retail real estate — advanced to $52 million from $49.4 million. 

The corporate owns or manages 36 centers totaling roughly 13.9 million square feet, leased to greater than 2,700 stores. The portfolio expanded recently with the addition of Shake Shack and Dave & Buster’s. 

Tanger broke ground nearly a 12 months ago on a latest center in Nashville that can open inside a pair months. 

Yalof said the apparel business is Tanger’s “most cyclical.”

“You possibly can depend on home, you possibly can depend on athletic footwear,” he said. “Certain brands [in apparel] are hot and so they’re hot, hot, hot and other brands undergo a bit cooling-off period.” 

With inflation still high and fears of recession cropping back up, those cooling-off periods could last more as customers are needing that little extra push to spend.

“Brands which have chosen a more promotional strategy up to now 4 months have seen much better results than those that haven’t,” Yalof said.