COLORADO SPRINGS, Colo.--Jun. 5--Eugene and Pat Garcia could have been touring Garden of the Gods or Cave of the Winds during their Colorado vacation.
Instead, they were shopping at Castle Rock Factory Shops, the Swiss- chalet themed outlet mall 43 miles north of Colorado Springs where brand-name manufacturers sell their wares direct to the public at discount prices.
'We only covered part of it yesterday,' says Pat Garcia, visiting from New Orleans. 'We'll try to cover the rest today and we'll probably be back tomorrow.'
With 5 million visitors a year, Castle Rock Factory Shops is itself a tourist attraction, outpacing Garden of the Gods (1 million visitors yearly) and the Air Force Academy (720,000 annual visits). In 1994, 650,000 visitors to the outlet shops were from Colorado Springs, according to a mall survey.
Selling everything from designer dresses and baby shoes to silverware and sunglasses, Castle Rock Factory Shops is one of the top-grossing outlet malls in the nation, with annual sales of $300 per square foot, according to Value Retail News, an industry publication.
Before the Garcias leave, Pat will buy a jogging suit from Johnathon & Logan for $25 and Eugene will buy a sweater, pants and shorts at discounts of 30 to 70 percent from name-brand outlets that specialize in factory seconds, manufacturers' overruns and closeouts.
Then, with an armful of bags from Cape Isle Knitters, Boston Traders and Izod they'll walk out to a sea of chrome and glass to a parking lot reminiscent of a popular tourist attraction.
'We see it as an amusement park, where you add another ride every year,' says Anya Harris, spokeswoman for the Baltimore-based Prime Retail, Inc.,
owner of the 110-shop Castle Rock Factory Shops. 'There are many people who enjoy factory outlets as recreation and as a family experience.'
This year's new ride is a courtyard for interactive sports: a basketball free-throw area, a batting cage, an in-line skating rink or a tennis court where shoppers can try out wares from ski, tennis and camping factory outlets.
Though outlet malls have recently diversified their tenant mix to include the likes of Sony and IBM, this year Prime Retail plans to debut sporting goods manufacturers at one or more of its 14 outlet centers. Still on the drawing board, the interactive sports concept will likely find its way to Castle Rock Factory Shops, Harris says.
The concept borrows from an old idea: shopping as entertainment, a concept pioneered by regional malls when they incorporated movie theaters.
'Our goal is to create a destination with just the right amount of merchant mix, family appeal and old-fashioned fun,' says William Carpenter, president of Prime Retail.
Outlets are placed just far enough outside a major city so they won't compete directly with the city's major retailers. That's because many of the manufacturers that own the outlets are also major suppliers to department stores.
And they often are located in tourist spots to take advantage of tourist traffic. The Garcias spent three leisurely days strolling the stores at Castle Rock Factory Shops.
'When you're on vacation you generally don't feel pressed for time, you're not looking at your watch, yet people will incorporate shopping into their vacations. That's a good formula,' says Marie Beninati, head of the retail practices division for CSC, a New York-based consulting firm for manufacturers and retailers.
With $11 billion in annual sales, the nation's 300 factory outlet malls are only a tiny slice of America's $2.1 trillion retail pie.
But sales growth at factory outlet shops is phenomenal. Annual sales increases of 8.7 percent in 1994 and 22 percent in 1993 dwarf the retail industry as a whole (about 5 percent each of the last two years).
That's why factory outlet stores continue to spread across the landscape. Another outlet mall, Castle Gate Factory Shops was scheduled to break ground Thursday on a 40 to 60 store complex, on the same side of Interstate 25 as Castle Rock Factory Shops.
Castle Gate, developed by Hartford, Conn.-based Core Development, is expected to open by Christmas, giving Castle Rock a total of 610,000 square feet of factory outlets. The new mall will be Colorado's fourth major outlet center, joining those in Silverthorne and Loveland. Another four are proposed across the state from Glenwood Springs to Greeley.
The boom in Castle Rock reflects a nationwide trend. Four years ago there were 180 outlet malls; today there are 300. With so many new choices, the question becomes, when does this retail niche reach its saturation point? How many outlet malls can shoppers really support?
'When you drive 40 minutes from Colorado Springs to Castle Rock would you rather have 110 shops or 170 shops to choose from? A critical mass makes it more appealing to the customer,' says Kris Hundley, editor of Value Retail News. 'The nation can support twice as many outlet malls.'
But Mike Schroeder, chief investment officer for First International Asset, says the Naples, Fla., investment firm recently sold its stock in Prime Retail and other factory outlet developers because of an uncertain future.
'The real question we had is whether they can maintain the growth. How many of these things around the country do we really need?' Schroeder says. By the next century the hot retailing trend will be shopping on television and on the Internet, industry analysts say.
'The thing that's driving the outlet mall is the consumer's quest for value. But in five or 10 years, the driving factor will be the quest for convenience and time and that's when home shopping will be a driving force in retailing,' Beninati says.
Among the companies selling on-line are Eddie Bauer, Spiegel, JCPenney, Marshall's and Frederick's of Hollywood. But the system is still clunky, merchandise is limited and there's nothing to guarantee that a thieving computer hacker won't swipe your credit card number and charge trips to Tahiti.
'Most people find shopping as entertainment,' Harris says. 'It is a recreational, pleasurable activity. They like the experience, of looking at the garment, touching it and putting it on.'
Just ask Pat and Eugene Garcia. COLORADO SPRINGS, Colo. - If this banner could talk it would be SCREAMING.
In red letters it proclaims: 'SAVE-SELECTED DRESS SHIRTS AND MEN'S SHORTS $9.99.
Who can resist? The sale items are in bins just inside the door of clothing manufacturer Van Heusen. It couldn't be easier to pick one, or two, shirts up and just buy them.
But the dress shirts were pink and yellow. The only white one had an 181/2-inch neck with 32-inch sleeves, perfect for Mercury Morris, the diminutive but powerfully built former running back of the Miami Dolphins.
Sweaters at Van Heusen for $9.99 were odd color combos and appeared to have lost their shape.
Factory outlet malls such as Castle Rock Factory Shops promise discounts of 20 percent to 70 percent off retail prices. But shoppers shouldn't expect that merchandise will necessarily be 70 percent off or that all items will be discounted.
'You still have to be a savvy shopper to take full advantage of what a factory outlet has to offer,' says Marie Beninati, an international consultant for manufacturers and retailers.
And sure enough at the back of the Van Heusen store is the real deal. A $28 white button-down shirt priced at $17.95 was reduced 30 percent to $12.57. Might as well get two.
More and more, outlet merchandise, particularly clothing, is specially manufactured for sale in outlets, perhaps as a cheaper imitation of the real thing.
But sometimes an outlet store's goods have been discontinued, they're last season's leftovers or they have slight defects.
That was the case at the Dockers Outlet. Casual slacks that sold for $36 in perfect condition had fabric flaws below the knee. Marked as 'irregular' they were reduced by one-third.
Music 4 Less advertised compact discs for $8.99. That's a good deal if you like Ted Nugent and Merle Haggard. Timeless classic rock and new releases ranged from $13 to $15. No deal there.
Electronics and computers are recent entries in the factory outlet game. To play the CDs you just bought around the corner, Sony offers refurbished CD boom boxes for $54.95.
Book Warehouse Factory Outlet is probably not the place to go if you're looking for a particular book. The selection is mostly limited paperbacks such as mini art books. 'The Life and Works of Picasso (or Lautrec or da Vinci) were three for $12. Self-help computer books cost $5.
But hardbacks like John Grisham's 'The Rainmaker' and a hastily put together Nicole Brown Simpson biography were discounted 25 percent.
'You need to know your brand and you need to know the full price comparison and you'll be satisfied,' says Anya Harris, of Prime Retail, parent company of Castle Rock Factory Shops.
