For businesses looking to test market a new idea, lower their rental costs or just try out something new, pop-up stores might be the way to go. A recent article in INC. magazine reinforces that idea. “Pop-up stores seem to be popping up everywhere,” the story notes. The national retail vacancy rate is at a three year high, so these temporary shops dropped into empty spaces have become an attractive option for both business owners and landlords. “It’s a great way to market your products or your real estate,” says Christina Norsig, CEO of PopUpInsider.com, a site that lists available pop up locations. Indeed, with retailers getting ready for the holiday shopping season, more and more companies are selling their goods out of pop up stores. “Large fashion retailers and high-end designers have long demonstrated the success of the pop-up model for generating buzz about new brands and designers,” The Wall Street Journal notes. “But now, small businesses in a wide range of industries are testing new retail concepts and markets by leasing commercial space on a short term basis, in some cases for just a few weeks. They say property owners are more receptive to the arrangements than in the past, because the downturn has increased vacancy rates.”
David A. Jacobs, director at Llenrock Group LLC, a commercial real estate investment bank in Philadelphia, tells the Journal that commercial leases typically average five years. “There are more opportunities for small mom and pops to make short term deals,” he says. “Landlords are desperate for any source of income so they can pay their mortgage.” But it’s not just the smaller retailers trying out the concept; the Big Boys are jumping in, too. Published reports say that Toys”R”Us is also going all out for the holidays, hiring at least 10,000 people to expand its base and staff its pop-up stores for the biggest shopping season. “We’re not projecting a dramatic increase in the economic environment. We’re saying Christmas will come,” company CEO, Jerry Storch says. “What I need to do is make sure we’re stocked up with the right product for Christmas if that’s being optimistic, great.”
And it’s not just Christmas or other holidays drawing the pop-up crowd. Retailers are using the short term venues to make a statement, try out a new concept or just draw buzz. The New York Times reports that the Architectural League of New York took a 3,100 square foot storefront for two months and used it for a photography exhibit. Dennis P. Brady, the managing director at Jack Resnick & Sons, the building owner, told the Times, “We are not making any money on the deal, but we thought it might be good to show a little life on the street. We figured it’s good for the neighborhood, good for the store and good for the building.” Ellen Baer, president of the Hudson Square Business Improvement District, where the Architectural League leased its space, added, “It helps to showcase available spaces, it brings foot traffic here that might not otherwise come to this neighborhood, and it provides people with activities that are consistent with the theme and vibe of the neighborhood.”