Tanger Factory Outlet Centers, Inc.: history, ownership, mission, how it works & makes money

A Brief History of Tanger Factory Outlet Centers, Inc.

Tanger Factory Outlet Centers, Inc. was founded in 1981 by Stanley K. Tanger. The company's first outlet center, the Tanger Outlet Center, was opened in Burlington, North Carolina. This inaugural location marked the beginning of Tanger's focus on developing and managing factory outlet centers that feature name-brand merchandise at discounted prices.

By 1993, Tanger went public, listing its shares on the New York Stock Exchange under the ticker symbol "SKT". At the time of its IPO, the company had a market capitalization of approximately $115 million.

Throughout the 1990s, Tanger expanded significantly. By the end of 1995, the company owned and managed 20 outlet centers, with a total leasable area of about 6 million square feet.

In 2001, Tanger introduced its "Tanger Club," a loyalty program aimed at enhancing customer retention and increasing foot traffic. This initiative proved successful in boosting sales across many locations.

In 2008, the company faced significant challenges due to the economic downturn, which affected consumer spending. Despite these hurdles, Tanger continued to adapt and innovate. By 2010, the company's portfolio included 39 outlet centers, representing approximately 13 million square feet of retail space.

As of 2022, Tanger Factory Outlet Centers, Inc. operated 37 centers in 22 states and Canada, covering a total of around 12 million square feet of retail space. The company reported net income of $78 million and had an occupancy rate of 95%.

In response to changing consumer preferences and a shift toward online shopping, Tanger has also embraced digital marketing strategies, including the launch of their e-commerce platform in 2020.

As of October 2023, Tanger Factory Outlet Centers, Inc. reported total revenue of approximately $311 million for the year, demonstrating resilience in a challenging retail environment. The company has a market capitalization of about $1.2 billion and continues to focus on enhancing the shopping experience through various innovative approaches.

A Who Owns Tanger Factory Outlet Centers, Inc.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a publicly traded real estate investment trust (REIT) specializing in the ownership, operation, and development of outlet shopping centers. As of the second quarter of 2023, the company operates 37 outlet centers across the United States and Canada, encompassing nearly 12.1 million square feet of retail space.

The company is primarily owned by a mix of institutional and individual investors, with significant holdings from various asset management firms. The largest shareholders in Tanger Factory Outlet Centers include:

Tanger's management team, including the CEO and other executives, also maintains a stake in the company, although their individual percentages are generally smaller compared to institutional investors. The insider ownership structure, as of recent filings, stands at approximately 1.5%.

As of August 2023, Tanger Factory Outlet Centers has a market capitalization of approximately $1.2 billion. The company reported a net income of $53.3 million for the fiscal year ending December 31, 2022, and an adjusted funds from operations (AFFO) of $101.2 million, representing an increase from the previous year.

The financial performance of Tanger Factory Outlet Centers has been characterized by a recovery in rental income post-pandemic, with rental revenue reaching $265.2 million in 2022, compared to $242.1 million in 2021. The occupancy rate of Tanger's outlet centers stood at 91.5% as of Q2 2023, indicative of strong demand for outlet retail space.

In terms of dividend payouts, Tanger has historically provided attractive returns to its shareholders. The annual dividend for 2023 is set at $0.68 per share, yielding approximately 7.4% based on the current stock price. This reflects the company's commitment to returning value to its investors while maintaining moderate leverage with a debt-to-EBITDA ratio of 5.1x.

The company's primary competitors in the outlet center space include Simon Property Group and Premium Outlets, both of which also operate sizable outlet shopping centers in North America. This competitive landscape influences Tanger's strategic initiatives, particularly in enhancing customer experiences and expanding its brand partnerships.

As Tanger Factory Outlet Centers continues to navigate market challenges and opportunities, the ownership composition, financial performance, and strategic direction remain critical for potential investors and market analysts evaluating the company's future prospects.

Tanger Factory Outlet Centers, Inc. Mission Statement

Tanger Factory Outlet Centers, Inc. is a leader in the outlet shopping industry, focusing on creating meaningful experiences for consumers through its extensive portfolio of retail spaces. The mission statement emphasizes providing high-quality outlet shopping that caters to the desires of its customers, while also delivering value to its retail partners.

The company's mission is centered around several key principles:

• To provide exceptional outlet shopping experiences.
• To maintain strong relationships with tenants, promoting their success.
• To ensure customer satisfaction through service and amenities.
• To enhance shareholder value through strategic growth and efficiency.

As of October 2023, Tanger operates 37 outlet centers across 20 states. The company focuses on a diverse range of retail offerings, encompassing over 2,700 brands from various categories, including apparel, home goods, and more.

As detailed in the table, Tanger Factory Outlet Centers experienced a notable recovery in 2021 and continued growth into 2023. This upward trend reflects the company’s commitment to enhancing its retail offerings and bolstering customer engagement.

The company prioritizes sustainability and community involvement as part of its mission, engaging in initiatives that benefit both local economies and the environment. This focus is evident through their use of energy-efficient systems and support for local charities.

With a current market capitalization of approximately $1.5 billion as of October 2023, Tanger continues to pursue strategic development opportunities, reinforcing its position in the retail sector. The company’s dedication to its mission is reflected in its operational strategies, investor relations, and community engagement practices.

How Tanger Factory Outlet Centers, Inc. Works

Tanger Factory Outlet Centers, Inc. operates as a real estate investment trust (REIT) that specializes in the ownership, operation, and development of outlet shopping centers. As of the third quarter of 2023, the company manages a portfolio of 37 outlet centers across 24 states in the United States and Canada.

The primary revenue stream for Tanger comes from leasing retail space to a variety of tenants, primarily national and regional brands. As of September 30, 2023, the company reported a 91.5% occupancy rate across its properties. This represented a slight increase from the 90.6% occupancy rate recorded in the same period the previous year.

Tanger's tenants include well-known brands such as Nike, Adidas, and Levi's. The average rental rate per square foot was reported at $20.50, with a remarkable year-over-year increase of approximately 3.2%.

The company’s business model hinges on its ability to attract and retain high-quality tenants. Tanger employs a multi-channel marketing strategy, utilizing digital platforms, social media, and traditional advertising to drive consumer traffic to its centers. This approach directly correlates with tenant sales performance; for 2023, tenant sales at its centers averaged approximately $370 per square foot.

Additionally, Tanger places a strong emphasis on customer experience by creating engaging shopping environments and enhancing amenities. Recent investments in technology have led to improved operational efficiencies, allowing for a more streamlined consumer experience. For instance, the implementation of mobile app features has contributed to an increase in customer engagement and foot traffic.

The company also focuses on sustainability initiatives, which include energy-efficient building practices and waste reduction programs. These efforts have not only improved operational costs but also enhanced the brand's reputation among environmentally-conscious consumers.

In terms of growth strategy, Tanger Factory Outlet Centers, Inc. is pursuing selective expansion opportunities. The company has an active development pipeline with projects totaling $120 million, aimed at expanding both existing centers and new locations. They are also exploring joint ventures to diversify their geographical presence and tenant mix.

In summary, Tanger Factory Outlet Centers, Inc. operates through a well-defined business model that combines property management, tenant relations, and customer engagement. The focus on sustainability and technology integration further strengthens its competitive advantage in the retail real estate sector.

How Tanger Factory Outlet Centers, Inc. Makes Money

Tanger Factory Outlet Centers, Inc. operates a portfolio of outlet shopping centers, primarily in the United States and Canada. The company generates revenue through various channels, primarily based on leasing retail space to brand-name retailers. As of 2023, Tanger owns and operates **37** outlet centers in **20** states and **Canada**.

The major sources of revenue for Tanger include:

• **Rental Income**: The bulk of Tanger's income is derived from rental payments made by tenants. In 2022, Tanger reported rental revenue of **$432.5 million**, with a **4.5%** increase compared to **$414.1 million** in 2021.
• **Tenant Reimbursements**: These are costs associated with property expenses that tenants are responsible for, contributing around **$130 million** to Tanger's revenue in 2022.
• **Common Area Maintenance (CAM) Fees**: Tanger charges tenants for the upkeep of shared spaces within their centers, which added approximately **$20 million** to their income stream.
• **Sales of Properties**: Occasionally, Tanger sells underperforming properties, providing a one-time boost to revenue. In **2022**, the company sold **two** properties for **$27 million**.

In terms of financial performance, Tanger's earnings per share (EPS) for 2022 was reported at **$1.24**, reflecting a **6%** growth over the previous year. The net income for the company for the same year was **$96.9 million**. Their adjusted funds from operations (AFFO), a key metric for real estate investment trusts (REITs), was **$247 million**, translating to an AFFO per share of **$1.91**.

The company maintains a diversified tenant base which is crucial for its stability. As of their latest report, Tanger's major tenants include prominent outlets such as Nike, Coach, and Under Armour. Approximately **75%** of the total rental revenue is generated from the top **10** tenants, highlighting the concentration risk associated with a limited number of tenants.

Tanger also focuses on effective property management to enhance its revenue potential. The company's occupancy rate as of late **2022** was approximately **95%**, indicating a strong demand for retail space in their outlet centers. Additionally, the company has been actively investing in property upgrades and enhancing customer experiences, which have resulted in increased foot traffic and higher tenant sales.

In terms of stock performance, Tanger's share price was around **$16.50** at the end of **September 2023**. The company has an annual dividend yield of approximately **6.7%**, which is appealing to income-focused investors. The total dividends paid in **2022** amounted to **$136 million**, showcasing a commitment to returning capital to shareholders.

The competitive landscape for Tanger includes other outlet center operators like Simon Property Group and Brookfield Properties. Despite competition, Tanger has managed to maintain a solid market position due to its strategic locations and focus on premium outlets.