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Simon (SPG) and Leap Partner to Boost Omni-Channel Retailing

Simon Property Group SPG announced that Leap, the retail platform for modern brands, will open numerous stores at its properties. The move will help many digitally native brands to strategically expand as omni-channel retailers.

In recent years, omni-channel retailing has gained momentum and has become the focal point for many retailers. Although online shopping is convenient, physical stores will remain a vital sales channel over the long run as the benefits and satisfaction of visiting a brick-and-mortar store cannot be replaced with e-commerce.

In this context, Simon Property’s adoption of an omni-channel strategy and successful tie-ups with premium retailers has paid off well. Moreover, its online retail platform, coupled with an omni-channel strategy, is likely to be accretive to its long-term growth. Hence, its recent move is a strategic fit.

To begin with, Simon Property and Leap intend to open four stores between California and Florida. These are True Classic Tees in Los Angeles' Del Amo Fashion Center® and ThirdLove, Sugarfina and Goodlife in Florida's Town Center at Boca Raton®.

Per Zachary Beloff, vice president of leasing at Simon Property, “We are excited to work with Leap to help introduce growing brands to the value of brick-and-mortar retail. This is a pivotal time where stores are top of mind with nearly every brand growing in the U.S., and with the speed and nimbleness of the LEAP model, the expansion process has been streamlined immensely.”

As retailers realize the importance of omni-channel retailing and seek to open brick-and-mortar locations across the United States, they are likely to capitalize on the years of experience and expertise that Simon Property and Leap have to offer. The association between these two entities will help brands select top, data-driven locations for their business.

In addition, Simon Property has been exploring the mixed-use development option, which has gained immense popularity in recent years as it helps capture the attention of people who prefer to live, work and play in the same area.

It even capitalized on purchasing recognized retail brands in bankruptcy. Investments in them seem strategic for Simon Property as the brands have been generating a decent amount from digital sales.

With a solid balance-sheet position and ample financial flexibility, SPG remains well-positioned to capitalize on long-term growth opportunities.

Analysts seem bullish on this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for the company’s 2022 funds from operations (FFO) per share has been revised marginally upward over the past week to $11.68.

Shares of SPG have gained 28.8% compared with the industry’s growth of 16% in the quarter-to-date period.

Zacks Investment Research
Zacks Investment Research


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Stocks to Consider

Some better-ranked stocks from the retail REIT sector are Regency Centers REG, Tanger Factory Outlet Centers SKT and American Assets Trust AAT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Regency Centers’ current-year FFO per share is currently pegged at $3.97.

The Zacks Consensus Estimate for Tanger Factory Outlet Centers’ ongoing year’s FFO per share has presently stands at $1.80.

The Zacks Consensus Estimate for American Assets Trust’s 2022 FFO per share is pegged at $2.26, presently.

Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.


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