Simon Property Group, the largest US retail property owner and shopping mall operator, is entering e-commerce.
Together with Rue Gilt Groupe, which owns the online shopping sites Gilt and Rue La La, the company is launching a new platform for selling clothes and shoes with permanent discounts.
Starting in spring 2019, Simon has been testing ShopPremiumOutlets.com, a site built on its own premium outlet business. The company manages dozens of outlet centers both in the US and international markets. As part of testing the site's ability to sell merchandise, Simon worked with selected retailers at its locations, including Woodbury Common Premium Outlets in New York.
To date, more than 2,000 brands have signed sales agreements on ShopPremiumOutlets.com, providing about 300,000 products. Among the brands invited to the new project are Saks Off Fifth, Aeropostale, GH Bass & Co. Factory Outlet, Cole Haan, Nautica and Under Armor.
The company says that in creating the online platform, they studied feedback from customers who often visit outlet sites in search of a greater variety of brands within a single online purchase. Simon does not expect the creation of an online platform to have a negative impact on the company's core outlet business.
Once ShopPremiumOutlets.com is launched, it will be managed by the Rue Gilt Groupe team. Simon plans to invest $280M in the new business. In 2020, the project will be developed using part of Simon's annual marketing budget, which exceeds $100M.
As part of the deal, which is subject to U.S. regulatory approval, Simon Property Group and American billionaire Michael Rubin, Chairman of Rue Gilt Groupe, will become equal partners in ShopPremiumOutlets.com and Gilt Groupe.
Simon also plans to launch a service on the website to provide information about the availability of goods in outlets managed by the company. In the future, Simon is also considering launching a similar online project that will bring together classic shopping malls in the company's portfolio.