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Outlet center owners see need for diversification from traditional retail

Outlet center owners see need for diversification from traditional retail

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QUEENSBURY — The outlet store plazas on Route 9 need to diversify as the economy changes, Adirondack Outlet Mall owner David Kenny warned town officials this week.

He came to the Queensbury Planning Board on Tuesday to get approval to reduce the size of the building project he proposed last year.

The outlet business is no longer booming, he said.

In May, Old Navy opened on the Million Dollar Half Mile. Last year, Michael Kors and Vera Bradley also opened.

However, the Comfort Suites just closed. Wilson’s Leather and Gymboree announced in January they were both closing, and Dress Barn announced in May that it was closing all its stores at the end of the year.

In addition, Kitchen Collection recently told Kenny it was closing, he said.

In response to what Kenny sees as the change in business, he reduced the size of his next project. A planned 12,000-square-foot building in front of the Clarion Inn & Suites hotel has been reduced to 5,000 square feet. He now plans to have a “national brand” with a drive-in use half of the space, and is marketing the other half to non-outlet businesses. He is envisioning a bank or a cellphone store.

“The market’s taken a sharp turn to the left,” Kenny told the Planning Board. “There’s no more new outlets. We’ve got three closing in another month. You really have to go to mixed use.”

He currently has 30,000 square feet of empty storefronts.

“I’ve got so much empty space,” he said. “I’ll always have 8, 10(,000) empty, he said, referring to the thousands of square feet of space he has vacant. “There’s just not enough business.”

The main problem is that customers are buying online, he added.

“No one shops in stores,” he said.

But others said the outlet business is strong.

One marketing company said it regularly gets requests from outlets looking for a location along the strip.

The Outlets at Lake George is doing well, said Corey Shanus, president.

“The Route 9 corridor, we think there’s a good future to it,” Shanus said. “We think the area is on the upswing.”

But he added that he has “great respect” for Kenny and that Kenny is in a tough position.

“When you’re trying to attract quality tenants, they want good co-tenants and exposure to Route 9,” he said.

Kenny is trying to fill a new, but empty center that is perpendicular to Route 9. That’s going to be difficult, Shanus said.

“I could understand his frustration,” he said.

He added that Kenny is right to call for diversification along the strip.

“That’s correct. You want a balance,” he said.

And Kenny is right that there are market pressures, he said.

Not only are people buying online, but the Canadian dollar has lost value in the last few years.

“We get a big Canadian base, which has been hit hard,” he said.

He thinks brick-and-mortar stores are still essential to support online shopping.

“Your online sales might not be what they are without a place nearby to pick up stuff or try it on,” he said.

Kenny is now recruiting businesses that don’t rely on online sales.

Quick-service restaurants, for example, still draw in customers.

“They’re not affected by the dot-com business,” he said.

He’s also looking for tenants who aren’t on the outlet strip already.

“That’s what we have to do. We have to bring in other business,” he said.

He thinks a bank with an ATM could be popular.

“The strip has no bank. There’s no place for people to go,” he said.

He’d also like a cellphone store.

“There’s no one around. People from Lake George have to go to Queensbury,” he said. “I would love to see a phone company there. Cellphones, that’s a big business.”

You can reach Kathleen Moore at 742-3247 or kmoore@poststar.com. Follow her on Twitter @ByKathleenMoore or at her blog on www.poststar.com.

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