Shoppers at Maryland's newest factory outlet center, opening this August in Hagerstown, will find dozens of familiar, nationally known brands, among them Gap, Polo Ralph Lauren, Jones New York, Tommy Hilfiger, J. Crew and Nike.
The developer, Baltimore-based Prime Retail Inc., plans to announce leases with about 45 merchants today during a preview tour of the village-style Prime Outlets at Hagerstown, which is under construction. The center, at the northwest corner of Interstate 70 and Route 65 in Washington County, will open Aug. 7.
The 218,000-square-foot first phase will house about 60 stores, an enclosed food court, a playground and a customer-service center, all designed around landscaped pedestrian walkways and courtyards.
Prime Retail officials expect the first phase to open at least 90 percent occupied, with merchants selling factory-direct apparel, housewares, electronics, shoes, gifts and accessories, typically at 25 percent to 30 percent off regular retail prices.
"We have high expectations on this particular site," William H. Carpenter Jr., Prime Retail's president and chief operating officer, said yesterday. "We believe we have a phenomenal mix that will draw traffic. Brands are what people can relate to."
Initially, Prime expects 3 million shoppers and sales of $40 million to $60 million a year. The center will bring in 400 jobs for Hagerstown, with the potential for another 400. For the state, the center should initially generate sales tax revenue of between $2 million and $3 million.
Two additional phases of development -- including one under construction -- would bring the center to more than 400,000 square feet with 120 stores. Tenants have committed to about two-thirds of the 100,000-square-foot second section, which is expected to open in time for the holiday rush in November with 25 to 30 stores and a stronger emphasis on housewares. The timing of the third phase, 100,000 square feet and 25 to 30 stores, depends on leasing.
The center should live up to developers' expectations, said David Fick, senior financial analyst with Legg Mason Wood Walker Inc. in Baltimore. For Prime Retail, a real estate investment trust that became the world's largest outlet owner and operator by acquiring Horizon Group Inc. last week, the center will be the 50th in a portfolio with properties in 26 states.
'Better tenant list'
"This should be one of the better centers they've ever opened," Fick said. "It's opening with a better tenant list than any center they've opened in the past."
Tenants that typically help secure such centers' success include Brooks Brothers, Tommy Hilfiger, Nike and Polo, Fick said, and all of those have signed on for the Hagerstown center's first phase. It's more typical for top outlet center tenants to wait to see whether a center will be successful before making a decision, he said.
"It will be a very solid outlet center," with leading designers drawing consumers, said Mark A. Millman, president of Millman Search Group Inc., a retail consultant and placement company in Lutherville. "Prime is now the player in the industry, and this is an area of the country where there hasn't been a lot of [outlet] development. It's in close proximity to Baltimore and Washington."
It should continue to attract tenants, he said, because many are looking to expand while fewer outlet centers are coming on line. However, Millman said, he believes the developers have overestimated the number of shoppers the center will draw.
The center is unlikely to steal business from other outlets in Maryland, although it could pull customers and eventually tenants from outlets in Martinsburg, W.Va., Millman said. Those centers, including the 14-year-old Blue Ridge Outlet Center, "will significantly feel the effects of Prime's project," Millman said. "It will cut off traffic from the Baltimore-Washington corridor."
Prime chose the Hagerstown site because of its expansion potential and proximity to major metropolitan markets, including the more than 7 million tourists who visit the Baltimore-Washington area and outlying attractions each year.
The open, village-style design, with parking lots off to the side of rows of stores, is one that Prime developed and has used for 10 years. Keeping centers open, rather than enclosed, can cut operating costs and ultimately reduce prices, Carpenter said. Pedestrian walkways and amenities such as food courts make the centers more convenient, he said.
"There's no reason a consumer at an outlet center should not have all the amenities you can get at a traditional shopping center," Carpenter said.
A division of Prime Retail will run one of the center's stores, Designer Connection, which sells high-end men's and women's fashion brands such as Versace and Fendi -- typically manufacturers that do not have their own outlet stores. It's a new concept for Prime, which has opened four such stores around the country.
Other outlet retailers include G. H. Bass, Britches Great Outdoors Factory Store, Carter's Childrenswear, Coach, Cosmetic Center Outlet, Dress Barn, Fuller Brush Factory Outlet, London Fog, Nine West Outlet, OshKosh B'Gosh, Rack Room Shoes, Samsonite Company Store and Van Heusen Direct.
Prospective tenants for the second phase include Disney, Calvin Klein, Fila, Eddie Bauer, Bugle Boy and Sunbeam.
The center is the first Prime has built in Maryland. The developer acquired two Maryland outlet centers as part of the Horizon merger, one in Queenstown and another in Perryville. The developer is considering expanding the Queenstown center, on U.S. 50, and has plans to spruce up the Perryville center beside Interstate 95.
Pub Date: 6/25/98