Popping up to test the retail waters

Apr.April 08, 2009 12:16 PM
From left: Vitamin Water, Jeffrey Roseman, Miraval Living

Flowers aren’t all that’s popping up for spring. Around New York City, retailers and landlords alike are becoming more interested in pop-up stores — retail spaces that stay open for only a few weeks or a few months.

These stores are not a new phenomenon, but until recently they have been most popular around the holidays. Now economic conditions are shifting the seasonal pattern of pop-ups. At least four retailers have established a pop-up presence in the city over the last month, and brokers say even more retailers are looking to do the same.

“I think they are more prevalent,” said Faith Hope Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman. “Retailers can test the market without diving in and taking the whole risk.”

In a tough economy, pop-up stores can be beneficial to landlords, too.

“I think landlords are a little bit more receptive to them,” said Jeffrey Roseman, executive vice president and principal at Newmark Knight Frank Retail. “There [are] a few more empty stores these days.”

But pop-up stores don’t get many rent reductions or incentives from landlords, even in a recession, Roseman said.

Newmark brokered the deal for a Vitamin Water pop-up that opened recently at 626 Broadway between Houston and Bleecker streets.

There is a perception that pop-up stores slow down the market for a particular space, said Peter Weisman, director at Lansco. But, he said, “pop-up stores traditionally do…generate some interest in the space itself — get people in there.” Weisman has been working with men’s clothing retailer Scott Kuhlman, who is trying to establish temporary stores in vacant retail spaces. Kuhlman has promised landlords he will leave at a moment’s notice if a longer-term tenant is found. Kuhlman has already moved into one space in Williamsburg.

Several other retailers have opened short-term shops in the last few weeks. Sebago, a boat shoe company, will keep its pop-up store at 125 Rivington Street open through April 20. Harlem-based fashion designer Nicole Romano has a pop-up shop open in The Plaza. Smith + Butler, a boutique based at 225 Smith Street in Brooklyn, has a pop-up space on the Lower East Side through May 25.

Pop-up stores may, in fact, be the retailers most likely to succeed in this market, because they bring to customers what Nancy Berger, founder of branding business Grace Group, calls the “limited edition-slash-velvet rope experience.”

Berger’s company recently launched a division, Pop-Up Tart Productions, devoted to short-term stores.

There can be a synergy between pop-up stores and residential real estate, Berger said. Pop-Up Tart Productions put on a pop-up event at Miraval Living, at 515 East 72nd Street, last weekend. Brands included M Missoni, Lancome and others. The pop-up event also brings traffic into the building, hopefully driving condo sales.

“[People are] afraid to shop right now, but we want to shop,” Berger said. “If [customers] could say, I just want to go see the building,” they’re more likely to shop. The Miraval event brought in about 500 people and resulted in fashion sales of between $40,000 and $50,000, she said.

Few pop-up stores have come to the most popular retail corridors, said Christine Emery, senior managing director at Lansco, because landlords are trying to retain the tenants they already have through tough times. But that may change at the end of the summer, Emery said.

“Either things’ll start looking up or…you really will see some available space in prime areas,” she said.

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