Outlet shopping shifts

BOAZ, Ala. — Twenty miles off Interstate 59 South, down a two-lane road through patches of farm land and humble brick houses, is a little town that helped pioneer outlet shopping in the South.

“They were the big dog in the Southeast,” said Leon Downey, director of tourism in Pigeon Forge, which later evolved into an even bigger destination for manufacturing outlet stores. “Before 1986, Boaz was the one in the Southeast that everyone knew in outlet shopping.”

But most of the 130 outlet stores that once populated this North Alabama town now are closed. Many of the storefronts lining the labyrinth of concrete and asphalt in Boaz’s five outlet centers are empty, and shopping bags flutter across sprawling parking lots.

As outlet stores have grown up and changed across the South, Boaz and other older centers have been left behind. Industry leaders say the outlet industry still is flourishing in many areas. But the most successful often are tied to tourist destinations such as Pigeon Forge or along busy highways like the outlet centers on Interstate 75 near Dalton and Calhoun, Ga.

Chattanooga’s largest outlet center, the downtown Warehouse Row, has lost all but a handful of the more than 30 stores that popularized the center when it first opened more than two decades ago. Now a retail and office complex, its owners are looking to a new future.

retail roots

When the first outlet opened in Boaz, Ala., in the mid 1980s, few recognized it would ignite a consumer craze that would continue nearly 25 years later and make northeast Alabama a destination for many bargain-seeking shoppers, officials said.

The idea to have outlets in Boaz came as something of an afterthought, Mayor Tim Walker said.

Lee, a jean manufacturer and subsidiary of Vanity Fair Corp., moved one of its manufacturing sites in the heart of the city to a larger facility on the outskirts of town in the early 1980s.

The abandoned space, officials decided, was well suited to sell overstock and damaged goods, an idea they had gotten from stores in Reading, Pa., Mr. Walker said.

Larger cities such as Huntsville and Birmingham in Alabama, Atlanta and Chattanooga all were within a day’s drive, and executives believed that if a blue jean outlet could do well then so could an outlet center.

“All points led to Boaz,” Mr. Walker said, illustrating a map of the city’s proximity to major metropolitan areas. “When Boaz was developed as an outlet center no one had it.”

After the Vanity Fair Outlet opened in 1984, others began to follow.

“It didn’t take them long to see that if people were coming here with money in their pockets this is where you want to be,” he said. “Everyone got into this business. If you were in manufacturing you had a place in Boaz.”

Mr. Walker, who was hired as a manager at the Vanity Fair Outlets out of college, recalls when churches filled charter buses and renegade shoppers traveled hundreds of miles to paw through bargain bins and discount racks.

“We had to let 10 people out (of stores) and 10 people in to keep up with fire code,” he said.

Keyesta Sherman, the president of the Boaz Area Chamber of Commerce whose first job was at the Dansk Outlet in 1988, said that on the busiest days employees had to park miles away to get into work and customers waited in line for hours to buy items.

“It was crazy,” she said.

Over the Top

At its peak, there were 130 outlet stores in Boaz. But by 2001, three of the five centers were 50 percent occupied, Mrs. Sherman said.

Around 20 outlets remain in Boaz, stores including Gap, Tommy Hilfiger and Polo Ralph Lauren, but the city recently lost two larger linen outlets, she said.

West Point Stevenson and Macassa, which were closed nationwide, affected many outlet centers in small southern towns, she said.

West Point Stevenson was a anchor store in Boaz and at the Market Streets of Dalton in Dalton, Ga., and since the loss property owners have been forced to regroup.

“We are not sure what is going to happen there,” said Blake Walker, property manager at Market Streets of Dalton. “We are not going to be tied to getting an outlet-type store to replace WestPoint.”

In Boaz, property managers have worked hard in the last few years to recruit new businesses to the old outlet spaces, and some have been successful, said Amy Clem, a broker with Commercial Realty Solutions who manages the Boaz Outlet Center.

These days, the centers are about 75 percent occupied, mostly by mom and pop stores or local startups, said Mrs. Sherman.

Making it Work

If you ask Mr. Walker what happened to all the factory stores in Boaz, he is quick to refer to scripture: “Some fell on fertile ground, some fell on rocky ground, others came up and the weeds choked them out,” he said.

It’s the natural order of the retail universe, said Linda Humphers, editor of Value Retail News.

“The strong, well-marketed and well-merchandised outlet malls do well, and frankly no shopping center of any kind is going to stay successful if the owner doesn’t put a lot of energy into it,” said Mrs. Humphers.

Mrs. Sherman agreed. She said the Boaz outlets were overbuilt and the community could not continue to support them, but problems also have come from the fact that nearly all the property is owned by out-of-towners.

Boaz also is not a tourist destination and can’t benefit from the draw of a beach or a mountain like outlet centers in Pigeon Forge or Foley, Ala., she said.

Though Pigeon Forge has lost revenue from the outlets since they boomed in the mid 1980s and early 1990s, that city’s six outlet malls account for 11 percent of its tourism revenue, or $94 million a year, said Leon Downey, director of tourism for Pigeon Forge.

Dollywood attracted 2.4 million visitors to Pigeon Forge in 2007, and the Great Smoky Mountains National Park always has been a draw, he said.

Though many view Pigeon Forge as a successful outlet location, Mr. Downey said property owners already are looking to grow local craft and specialty stores at the locations.

“Things have changed,” he said. “Most every community has an outlet mall. My wife drags me to outlets all over. It’s not a novel attraction anymore.”

Industry leaders admit the nature of outlet shopping has changed. Yet, Mrs. Humphers said, outlet malls nationwide overall are doing well. In fact, 20 outlet mall projects have been planned over the next three years, she said.