Why?

The young consumer wants to come and shop in a physical environment.

They wanna touch the product.

They wanna see the, they wanna see the product.

They wanna shop in groups.

I, I think they're finding shopping is entertainment again, and they wanna get out there with their friends.

They wanna go to the c- the new, like, Lala Coffee.

Um, but also, how is all of this driving the investments that you are continuing to make as you do build out your footprint right now?

But where do you think retail is today? I mean, in terms of its health and its growth.

No, I think retail is, retail is a very important channel, and that's sort of a big question because as we think of retail, you know, when we think of retailers, we think of their ecosystem.

And their ecosystem, in order for a retailer to be successful today, you know, they're selling into department stores, they've got an online presence, they've got a full-price street and mall presence, and then they also have that off-price or discount presence.

And that ecosystem is critically important to the brand and the brand's evolution and the brand's survival because whether it's sell through their full-price channel and clear through their discount channel or meet a new customer through the discount channel that they might never have met in the full-price channel, that ecosystem's critically important, and the top retailers that we talk about today play in all of those different verticals along that, uh, ecosystem.

How do you, how do you see the consumer evolving with all of the things that are going on right now? What are your concerns? What are your observations?

Well, let's start with the concerns first.

I mean, there's so many unknowns out there.

Have they resolved the crisis in the Middle East? Have they not resolved the crisis? Are gas prices gonna go down? Are gas prices going to go up? So there's a lot of things that our consumer is worried about.

And I just wonder if you think in-store is beginning to grab some mindshare from the e-commerce, which is obviously still a huge priority.

Well, I think it's important.

Going back to the outlets for a second, you know, the, the least expensive way for a retailer to put their product in front of a consumer is the outlet space.

Uh, the margins are very good, but the price of entry is quite low.

And because of that, you know, one of the things I say all the time to the, the folks that work with us is if you wanna know what centers are doing really well, it's where the inventory is because the retailers wanna make sure that they're putting the inventory in front of the consumer.

So when you walk an outlet shopping center, or when you walk one of these mid-tier centers, uh, across our portfolio, and you see stores packed with inventory, it's because the retailers are making conscious decisions to take that inventory and put it in places where a customer is coming to shop.

Do you think that, that mix changes in the coming year?

Yeah, you know, look, I, I think that most of the folks are, are window shopping online, but they wanna come into the store and they wanna execute.

I don't wanna say dismissive, but, you know, President Trump was saying, "The prices of everything are going down." So the affordability issue that had been so f- you know, front and center for a long time, he really downplayed that, and you gotta wonder whether or not the consumer really is feeling some pressure because that is in fact what we heard in conference calls.

Yeah.

Well, look, I think the, the, the math equation of affordability with inflation going down, but employment and wages going up, I mean, you can do the math and say, "Okay, things will probably be more affordable." But in, in...

I think the consumer would probably argue that affordability means things are a lot cheaper than they are today.

And, you know, if- you know, I talked about it the last time I was on the show with you.

We talked about price deflation, especially in the outlet channel, where you can go and you can buy, uh, items that are priced below that inflationary level.

So value pricing is really the big winner.

Yeah.