Cut-Rate Fever

Bargain buys at factory outlets

Two months ago, Nancy Galvach, a restaurant owner from East Oakmont, Pa., visited the factory-outlet center 210 miles away in Reading and spent $573 on discounted clothing. Back home, she checked prices for the same goods in local stores and found that they would have cost her a total of $1,290. Today Galvach is planning shopping tours to help other people in her area share in the bargains.

Galvach is one of the growing number of shoppers across the U.S. who have discovered the surprising fact that buying at factory-outlet stores can wind up saving them anywhere from 20% to 70% on everything from designer jeans and leather goods to fine china and chain saws. Many middle-income families are traveling hundreds of miles to buy top-quality merchandise at rock-bottom prices. Says Jim Randall, a Connecticut real estate developer who in 1980 launched a factory-outlet shopping center in Norwalk: "This is not a fluke. Today's consumers are smarter and more value-conscious than ever, and will do their shopping at a place that offers good quality at low prices."

Along with the rapid proliferation of factory outlets has come a spate of briskly selling guidebooks. These are designed to help budget-minded families and singles find the best bargains in their part of the country. In Maine, the government publicity bureau has, since spring, printed 10,000 copies of a guide to factory outlets in 50 cities and towns. "Traditional retailers have not positioned themselves in today's market, and they no longer know who their customers are," says Annie Moldafsky, an Illinois-based author of the Good Buy book, a consumer guide to factory outlets. "The manufacturers' outlets offer personnel who know the product and give you information and service on that manufacturer's whole line. They've virtually changed places in the consumer market."

Situated 145 miles west of New York City in the picturesque Pennsylvania Dutch farm country, Reading has become something of a mecca for cost-conscious buyers. The city, which proclaims itself "the Factory Outlet Capital of the U.S.A.," has grown from no more than four outlets in 1973 to about 100 bargain shops, including those offering merchandise by Evan-Picone, Adidas and Danskin. Total factory-outlet sales in Reading last year are estimated at $80 million.

In Dayton, an aging factory located near Interstate 75 has been converted into a 20-unit outlet mall, offering luggage, draperies, clothing and even power tools at 50% to 70% below retail. Says Sanford Mendelson, whose family bought the building from General Motors last year: "People who never stopped in Dayton when passing by are now stopping like crazy."

In Southern California, residents with discount fever can sign up for Tours About Town, a weekly bargain-hunting expedition started last year by two enterprising teachers. Intrepid shoppers are bused from suburban Los Angeles to the city's downtown garment district and given a map, buying tips and money-saving details on local jobbers, wholesalers and factory outlets. Cost of the tour: about $15.

Some of the new factory-outlet centers are no longer off-the-rack spartan. In Florida, the Orlando Factory Outlet Mall, which opened last year on the road between the city and Walt Disney World, offers, in addition to the usual stores, an antique-costume portrait center, a time-share condominium sales office, a Pac-N-Send mailing service and a video-game room. Traditional retailers hope that the factory outlets will fade away with the return of better economic times. Perhaps, but in the meantime, factory outlets will continue to be today's fashion.

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