Simon Property CEO aims to create new sales event as inflation surges

David Simon, the chief executive officer of the biggest shopping mall owner in the country, wants to create a new type of annual shopping extravaganza as consumers are increasingly feeling the pinch of inflation just about everywhere they go.

Think Amazon Prime Day, but for retail outlet centers.

This event, dubbed “National Outlet Shopping Day” by Simon Property Group, is meant for people seeking out deep discounts on everything from new clothes and sneakers to sunglasses and luggage, Simon told CNBC in a recent Zoom interview.

The first iteration runs this weekend at the real estate owner’s 90 premium outlets and Mills-branded outlet properties in the U.S. About 300 retailers from J.Crew to Banana Republic to Puma will be taking part by offering deals exclusively at those locations, according to Simon Property. It’s one way that the mall owner is working with its tenants to lure cash-strapped consumers out to shop as budgets are squeezed and retailers are more competitive for shoppers’ dollars.

Retailers from Target to Gap have seen their inventory levels balloon as backlogged merchandise arrives from overseas at the same time consumers are shifting their spending away from so-called pandemic categories such as sweatpants and office furniture.

CNBC spoke with Simon, as well as Gary Duncan, president of Simon Property’s Premium Outlets and its Mills business, and Mikael Thygesen, chief marketing officer, about this weekend’s event, the state of the retail industry and the American consumer.

The conversation below has been edited down for clarity and brevity.

Why did Simon Property Group create this shopping holiday and decide to run it over this weekend?

Simon: The idea was in the works in early 2019. And then we couldn’t quite get it all together. We were going to do it in 2020, and Covid killed our plan. So we’ve always wanted to do this.

The genesis really was to give back to the consumer in terms of our special promotions and deals. But also to reinforce the Simon outlets have great brands. And we want them to be top of mind. We’re going to do this annually — and with some of the inflationary pressures this couldn’t come at a better time.

Thygesen: We’ve timed it between the traditional promotional windows, so Memorial Day is over and back-to-school hasn’t started.

What has the reception been like from your retail tenants to participate with discounts and other incentives to lure people to come out and shop?

Simon: We have 300 retailers, but I hope next year we’ll have 1,000. We expect to build on it each and every year. And obviously it’s our day, but we welcome participation from any outlet owner that wants to participate.

How have your outlet centers been performing relative to Simon Property Group’s namesake shopping malls,…