New factory outlet center follows discounters to fertile Long Island - McArthur/Glen Group Inc. building factory outlet shopping center in Bellport, New York

Discount Store News, July 8, 1991 by Jill Lettich

NEW YORK -- Long Island, N.Y., is a suburb that has recently become a retail haven for discounters and off-pricers. The latest news from the area is that a factory outlet mall is planned for the town of Bellport. Groundbreaking for the center is planned for sometime this month.

The project, being built by McArthur/Glen Group, Washington, D.C., will be a welcomed sight for shoppers that thus far had traveled as far as Secaucus, N.J., or Franklin Mills, Pa., for the experience of shopping at a factory outlet.

The center will include 30 makers/retailers in 95,000 square feet of space. According to the builders, all the spaces have been leased.

The outlet shoppers coming to Long Island will have plenty of discounters to see on the way.

Kmart just recently opened three stores -- in Babylon, Sayville and Levittown -- with up to 10 more expected to open in the next two years. T.J. Maxx is opening its first store here this fall in Islandia, in a strip center with Pergament, Staples and Fashion Bug.

Before Kmart, the primary discounters in the area were Caldor and Marshalls. Two Price Clubs and one B.J.'s Wholesale Club represented the membership warehouse sector. Smaller specialty chains are also in the region.

According to Cheryl McArthur, president of McArthur/Glen, the new center will not impact negatively on the area's current retailers. "We try to build 30 miles away from the nearest department store or regional mall, in this case the Smithhaven Mall, in Lake Grove," she said.

McArthur is also undaunted by the negative reports about Long Island's economic climate. "The entire country is going through through a recession right now, [and] Long Island is no different. The factory outlet center, however, is the retail venue of the '90s," she said. "The '80s were a decade where there was a lot of excess. The '90s are a decase of conservatism. People don't want to sacrifice quality, but no longer want to pay full price."

There are pluses for manufacturers as well. "Factory outlets used to be viewed as a dumping ground for seconds. Now, these outlet centers are sophisticated operations that manufacturers view as another means of distribution," said Richard Echikson, chairman, Retail Concepts Inc., Milburn, N.J.

Undoubtedly, the attraction of Long Island to retailers is the positive demographics. McArthur pointed out that there are "more than 17 million people in an 80 mile radius of where we are building."

These demographics also played an important part in Kmart's plans. During the openings of the Long Island units, chairman Joseph Antonini said the newer prototypes on Long Island could record per square foot sales as high as $250, compared to $200 per square foot averaged chainwide. Kmart officials also anticipate its Levittown unit to be among its largest volume stores.

Echikson said $400-per-square-foot to $500-per-square-foot averages are not unusual in factory outlets.

"The only danger to the concept is that some may be doing too well. If someone decides "we could do even better if we only sell at 25% to 30% off rather than 1/3 to 1/2 off,' they will kill the concept," he said.

For now, the concept is still alive.