A shopping center owner that has reshaped the retail landscape along the South Carolina coast launched its initial public offering 30 years ago, forever changing its trajectory.
Tanger Factory Outlet Centers Inc. marked the IPO milestone on May 10 in typical Wall Street style, by ringing the closing bell at the New York Stock Exchange, where its shares have been listed since 1993.
At the same time, the North Carolina-based company launched an updated logo and branding campaign while also announcing plans to add more dining and entertainment options to its tenant mix.
“Throughout our 30-year history as a public company, Tanger has continuously evolved to meet changing consumer needs while providing robust shareholder returns,” executive chairman and co-founder Steven Tanger said in a written statement last week.
But 2023 marks another key anniversary for the company: It was 20 years ago that Tanger stepped up its game in the Palmetto State, which now accounts for a dominant 14 percent of the company’s total retail space in the U.S. and Canada.
And unlike some traditional mall operators, the resilient landlord from Greensboro seems to be firing on all cylinders after a brief uptick in vacancies during the pandemic.
The same day, Tanger raised its earnings forecast for the rest of 2023. It also recently approved an 11.4 percent boost in its dividend, with the first quarterly payouts under the higher rate going out this week.
“We’re pretty confident in the future,” CEO Stephen Yalof said Wednesday during an appearance on cable business news outlet CNBC.
The company was founded in 1981 as family-owned Stanley K. Tanger & Co., which opened a strip center with brand-name outlet stores in Burlington, N.C.
A newspaper advertisement announces the opening of Tanger Outlets in North Charleston in August 2006. Charlston-raised actress and model Lauren Hutton was among the guests. Staff
Nearly two decades would pass before it dipped its toe below the state line into neighboring South Carolina. The Grand Strand was the first stop. Tanger and a joint-venture partner opened a shopping center with 60 merchants in mid-2002, not far from the established rival Myrtle Beach Factory Stores. The new kid on the block drew a reported 4 million shoppers in its first year and was quickly expanded.
Tanger wasn’t done in South Carolina. In 2003, it teamed up with private equity giant Blackstone Group and paid $491 million for the owner of nine rival shopping outlets, including Myrtle Beach Factory Stores and two others at the gateway to Hilton Head Island.
Afterward, Tanger described the acquisition as an “excellent” geographic fit that was part of a strategy to beef up its presence in high-end resort areas.
The company bought out Blackstone’s stake in 2005, when it also decided to fill the 200-mile gap between its coastal South Carolina holdings. The following year, it enlisted fashion icon and Lowcountry native Lauren Hutton to help cut the ribbon for its newly built $45 million North Charleston outlet center, which helped jumpstart the long-stalled, now-bustling Centre Pointe development at I-26 and I-526.
The potent new retail mecca also factored into the eventual demise of Citadel Mall on the other side of the Ashley River.
Today, Tanger still owns all five of the South Carolina shopping centers it has bought or built since the turn of the century, more than any other state.
They all seem to have come through the COVID-19 downturn fine. The occupancy for the 1.6 million-square-foot Palmetto State portfolio averaged 98.5 percent as of March 31, about 2 percentage points higher than Tanger’s overall rate.
“Leasing activity remains strong,” Yalof told investors and financial analysts during his quarterly update on April 28.
The company’s newly announced “Open Air” branding campaign is an effort to keep the momentum going, partly by differentiating Tanger from its enclosed mall competitors.
“First of all let’s go back to Covid, the ultimate scare when a lot of people thought that retail shopping was dead,” Yalof told CNBC’s “Mad Money” last week. “And then what opened? Open-air shopping centers was the only place where people could get together and gather. And then we took a lead off of that.”
He added that shoppers can expect to see more places to grab a meal or unwind in the years ahead. And while no immediate changes are on tap for the South Carolina properties, “there are additional plans in the pipeline we expect to be able to announce soon,” according to a statement Friday.
Tanger recently provided an early example of its strategy, saying that a Dave & Buster’s arcade, sports bar and restaurant will be added to its Savannah outlet center this year, while a Shake Shack will open at a Texas location.
“That’s what we’re spreading across all of our shopping centers,” Yalof told “Mad Money” host Jim Cramer. “So food and beverage is a huge part, whether we … replace an existing store with a better food-and-beverage operator” or develop “our peripheral land, which is a big piece of our business now.”
He also prayed for some rain as the vacation season heats up at its tourist-area shopping centers, specifically calling out Hilton Head and Myrtle Beach.
“When those clouds darken up the parking lots get full,” Yalof said. “So foul weather during the summer is an outlet center’s best friend.”