Hot soup and ice cream, anyone? While those foods may not seem like an obvious — or even appetizing — combination, for Coldstone Creamery and Original Soup Man, retailers that are opening shared spaces together, the pairing represents an adoption of a strategy pursued by many small stores. The move to shack up — borrowed from partnerships between larger national brands like Barnes & Noble and Starbucks — typically brings in a wider variety of customers and saves money in rent.
“The overall benefits [of shared retail] are traffic and synergy, bringing new customers to new places,” said Faith Hope Consolo, Prudential Douglas Elliman’s chairman of retail leasing and sales. “The trend started slowly because everyone worried about security issues, but now people aren’t so concerned about it as they are [about] attracting more customers. There are less dollars being spent, so there have to be new reasons to come into your store.”
Another local example is New York City Explorers, a childcare center, which brought in the café Blue Marble Ice Cream as a subtenant at a second location that opened in May at 186 Underhill Avenue in Prospect Heights, Brooklyn.
In the fall of 2007, the two businesses had opened stores on Atlantic Avenue within weeks of each other and soon noticed they had something in common.
“We would get the same customers all the time,” Kisha Gandsy, co-owner of New York City Explorers, said. “[Blue Marble] provided coffee for the moms that would then come to our play space.”
When Gandsy and her business partner, Keyanna Murrill, were planning their second NYC Explorers location, they contacted the Blue Marble’s owners, who agreed to open the space together. Blue Marble pays one-third of the rent in the shared space.
To make sure adult customers don’t feel like they are sipping coffee in a play room, the front of the store is Blue Marble’s café, with a wall separating the children’s center from the coffeeshop.
Gandsy said the companies are a good fit because both are focused on eco-friendly living. NYC Explorers offers healthy, organic snacks to their children and uses wooden toys instead of plastic. Blue Marble uses organic ingredients and biodegradable supplies.
“We couldn’t have opened with just any company,” Gandsy noted.
Jennie Dundas, who co-owns Blue Marble with Alexis Miesen, said sales in her two stores are comparable, even though she only has half the space, about 275 square feet, at 186 Underhill Avenue.
“I don’t know whether to credit sharing space with [NYC Explorers], the different neighborhood or our already built reputation,” Dundas said. “We snapped our fingers, opened our doors, and the first day the numbers were almost exactly the same.”
Sometimes, opposites attract. When Daniel Petryszyn bought the Coldstone Creamery franchise on Astor Place in June 2007, he wanted the Original Soup Man to share the store.
“We wanted to offer more of a year-round business,” Petryszyn said. “Coldstone and the Original Soup Man are both seasonal, and by combining them we can have business all year-round and expand our customer base.”
Petryszyn said there are now several Coldstone-Soup Mans around the country, including locations on Long Island, in Chicago and Arizona.
For retailers considering setting up shop together, the devil can be in the details.
As the owner of the store, Petryszyn pays the landlord of 2 Astor Place, as well as royalties to the two franchises, who were skeptical of the ice-cream-and-soup combination when it was first proposed.
“Both franchises wanted to make sure their brand was not affected by the co-brand,” Petryszyn said. “You have to share the exterior sign, and two different schemes are going on inside because of the two totally different products. A lot of my crew were hired for ice cream, and I was throwing soup at them. It was challenging, but we had great support.”
There are other considerations. Retailers have to agree on hours of operation and security for the store and whether customers of one store will be fans of the other. For example, Gandsy wondered if customers of Blue Marble would be annoyed by all the noise the children make.
Then there’s winning over the landlord.
“Most landlords prefer to deal with one person,” said Yitzchok Rosenwasser, a retail specialist for the Brooklyn-based LHI Properties. “And I know some landlords who say they don’t allow sublets.”
But with a faltering economy and steep rents, shared retail spaces are expected to increase, he said.
“Everyone shares the same interest in making money and pulling people into the store,” Rosenwasser said. “I think down the road it will become more popular if the retail market is not going in the right direction. It’s just a matter of saving on rent.”
“You see stores closing every day in Manhattan,” Petryszyn said. “Landlords are charging us crazy rents, so the only way to stay afloat is to come up with an innovative concept.”
NYC Explorers is considering taking its space in yet another direction. When the weather is nice, Blue Marble customers often ask to sit in the outdoor play space as they sip coffee and eat ice cream, so Gandsy is looking into creating a mini-restaurant in the backyard one evening a week.
“It’s a great yard, and the play space closes at six,” Gandsy said.
“For small businesses especially, where space is such a commodity, you have to be a reasonable business person, and you have to figure out the maximum you can do.”