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Prime Retail Plans Aggressive Marketing In Puerto Rico

Prime Outlets Puerto Rico among company’s top performers; CEO Glenn Reschke talks about company’s financial situation


May 31, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

LAS VEGAS, Nev.–Nine months after opening, Prime Outlets of Puerto Rico is already recording annual sales of $375 per square foot, thus ranking among the top five outlet centers of Prime Retail’s 42-mall portfolio. But with the opening of would-be competitor Belz Factory Outlet in Canovanas just two months away, Prime Retail is launching a four-month marketing effort to make sure things stay the way they are.

"We are investing a significant six-figures in a marketing campaign for the Puerto Rico market," Prime Retail Senior Vice President Frederick J. Meno told CARIBBEAN BUSINESS at the International Council of Shopping Centers Convention. The aggressive campaign will feature both advertising and marketing efforts and will run all through the Back-to-School season.

Meanwhile, CEO Glenn Reschke said all is good for Prime Outlets Puerto Rico in Barceloneta. "It’s exciting [to see] how Puerto Rico has embraced outlet shopping. The center is doing really well, a lot better than our average center," he said. Prime’s mainland outlet averages $245 in annual sales per square foot. "Many of our stores have reported they’ve exceeded expectations in terms of sales," he continued, adding that about 40,000 to 50,000 people visit the outlet per week.

With the 176,000 square feet of the outlet center’s first phase completely leased, Reschke said the company is starting to lease its second phase, which will increase the center by 80,000 square feet. "It’s not certain when it will be built because we want to pre-lease and get commitments for at least 60% to 70% of the space before we start any construction," he said.

Belz’ opening in August will help in the leasing of Prime’s second phase, noted Reschke. "Competition is actually good," he said. "The island’s market is big enough to support more than one outlet center, perhaps two or three. Several of our [U.S.] tenants have said that it would not be economical for them to open a single store on the island, but if they had two or three stores, they might consider opening. Based on the economies of shipping and management, sometimes it’s not productive if you only have a single store [at such a distance from the others]," he said. Many of Prime tenants will open at Belz.

"The more people become aware of the value found in outlet centers, whether in our center or in the competition’s, the better it is for us in the long run," he said.

Besides Puerto Rico, Prime Retail’s other news for the most part has been dim. "We had our troubles last year as a company. We found ourselves over leveraged with too much debt and we needed to restructure. We did that at the end of the year." As earlier reported (CB Jan. 11), Prime Retail closed on major refinancing of its assets and the sale of four of its outlet centers through a series of transactions that resulted in an aggregate of $174 million in net proceeds for the company.

This year the company plans to revamp its outlet centers and is investing $24 million in marketing efforts, an increase of 20% over last years’ marketing budget.

This Caribbean Business article appears courtesy of Casiano Communications.
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