Minnesota's first outlet mall opened in Medford in 1991 more than 50 miles from the Twin Cities to protect traditional malls and regular-priced retailers.
The distance has been shrinking ever since and will be obliterated later this month, when Macy's opens its latest Macy's Backstage outlet store inside its current store in Maplewood Mall.
"Macy's Backstage Maplewood was designed to bring great deals and the fun of the hunt into our existing location in Maplewood Mall," Michelle Israel, senior vice president of Macy's off-price business, said in a statement. "Backstage's focus on value and newness guarantees that, with each visit, shoppers will find an amazingly priced assortment of recognizable brands and trends. Frequent deliveries ensure there is always a new reason to come in and shop."
Backstage will include apparel for women, men and kids, shoes, home decor, cosmetics, accessories, gourmet foods, pet supplies and electronics. Much of the merchandise is purchased specifically for Backstage with brands that may not be sold in the full-line Macy's stores.
"The idea that these outlets sell only leftovers is no longer true," said George John, professor of marketing at the University of Minnesota's Carlson School of Management. "The merchandise intended only for outlet stores has become a secondary but important brand." At Nordstrom Rack stores, for example, only 15 percent of the merchandise is from Nordstrom department stores.
Macy's started opening Backstage stores in 2015. There are currently 52 around the country, including 40 in store-within-a-store locations. Only one is part of an outlet mall, at the Rim at La Cantera in San Antonio.
The Rosedale Macy's has a small Backstage department near men's, but it is not representative of the Backstage concept. The Rosedale Backstage was more of a concept test, said Macy's spokeswoman Emily Workman.
"The concept tested there is very different from the store-within-a-store concept we ultimately rolled out as Macy's Backstage throughout the country," she said. "There is still a very small home décor Backstage section at Rosedale from the test. That area is currently being phased out as we open our first store-within-a-store at Maplewood."
At 18,500 square feet, the Maplewood Backstage will also be much larger than Rosedale's test area, but still only take up one-quarter of Macy's first-floor selling space.
Macy's and other department stores have decided to embrace Americans' thirst for bargains by opening outlets closer to urban centers. Nordstrom, for instance, now runs almost twice as many Nordstrom Rack stores as it does its regular department stores. Macy's Backstage and Nordstrom Rack compete with outlet malls across the country and powerhouse discounters, such as TJ Maxx, Marshalls and Ross.
"There are more question marks for Macy's Backstage than Nordstrom Rack," said Dave Brennan, professor emeritus of marketing at St. Thomas. "Macy's is very promotional. It may be more difficult for them to pull off."
In this week's earnings call, Macy's reported a performance increase of nearly 7 points in its stores, including Backstage locations. In 2018, the company plans to open another 100 Backstage stores, some of them in premium malls to compete with Nordstrom Rack and Saks Off Fifth.
Locally, some outlet stores have struggled. Herberger's is closing its clearance center in Maplewood next month. Nearly a dozen stores have closed in Premium Outlets in Albertville in the past two years.
But the metro's newest outlet mall, Twin Cities Premium Outlets in Eagan, is almost fully leased. The retailers that have closed at the three-year-old mall — Jos. A. Bank and Perfumania — have closed many locations nationally as well. Bath & Body Works and GNC will fill their spots next month.