Retailers increasingly turn to ‘pop up’ holiday stores

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Shae Bischoff stocks the DVD and video game shelves at Toys “R” Us. The toy retailer is opening 600 temporary stores during the holiday season.

Stocking up: Shae Bischoff stocks the DVD and video game shelves at Toys “R” Us. The toy retailer is opening 600 temporary stores during the holiday season.

Black Friday, the day after Thanksgiving, earns its moniker for what it typically does for retailer’s ledgers. It’s the date most store owners watch their year’s bottom line turn from red to black.

So it only makes sense that a growing number of retailers would ask themselves, why not skip the slow-sales months altogether, open a store during the heaviest shopping days of the year, then shutter the doors after the merchandise is gone and the shoppers have drifted back home?

Smaller retailers have been doing this for years, but now big-box retailers are picking up the trend.

Toys “R” Us, for example, opened 600 new “pop-up” stores this fall, essentially doubling its number of stores nationwide.

Landlords, as might be expected, are happy about the arrangements, too, especially at a time when retail-space vacancies remain high.

“The concept has been around as long as I can remember, but it’s a brilliant idea,” said Jennifer Crowley, general manager at the Promenade Shops at Briargate. “It can take landlords up to a year to replace a permanent tenant. The temp store idea gives us an ability to keep the space viable and offer a unique product to our customers.”

Halloween retailers typically “pop up” during August or September. This year, national chains stores like Spirit Halloween, which operates more than 700 temporary locations nationwide, opened multiple stores around the Springs.

Coach House Gifts, a greeting card and collectibles retailer, unleashed its own brand of spooky store. Coach House operates a permanent store at the Chapel Hills Mall, but its owners took advantage of the Halloween season by launching The Halloween Bootique at the Promenade Shops at Briargate. Halloween Bootique opened during September, rocked through costume merchandise for two months, then sold off the last remnants of its stock the day after Halloween.

Toys “R” Us chose to open pop-up stores inside shopping malls in some markets, but in places like Colorado Springs, it chose big-box buildings, formerly occupied by chains that went bankrupt or moved to newer locations. The pop-ups typically measure around 4,000 square feet and offer perennial favorites including dolls, action figures, educational toys and video games. They don’t carry larger items like bicycles, power wheels and jungle gyms.

The chain launched two pop-up stores, known as Toys R Us Express, in the Springs, one at the First and Main Town Center off Powers Boulevard and the second at a former big-box store at the Woodmen Commons Shopping Center on the north end.

“Since we operate nearly 850 Toys “R” Us stores nationwide, we are able to obtain and examine consumer data and shopping preferences in markets across the country,” said Toys “R” Us spokeswoman Meghan Kennedy. “We chose the markets we felt would benefit from the convenience of having Toys “R” Us in local shopping area and selected quality, highly trafficked locations in those areas.”

Dave Moss, general manager at the Chapel Hills Mall, said temporary retailers typically pay a higher lease rate then their permanent neighbors, what he calls the holiday rate, but it’s only higher because of the season.

“The positive for temp retailers is they don’t have to make a long term commitment,” he said. “They usually stay here for two and half, three months. What has changed a bit though, is the quality of the available space. In our most recent market, temp stores can now choose from prime, first choice and second choices spaces.”

Moss figures the pop-up idea works great for some local retailers because it allows them to advertise their permanent location in town.

“Sit-means-Sit, a local dog training school, opened a store in the mall that was primarily a promotion for its regular business,” he said. “They did so well last year that they’re coming back again.”

The mall also hosts specialty temporary retailers like “Really Nice Stuff,” whose owner normally sells at shows and events around the region.

“Local pop-up stores that lease space in the mall create a win-win situation,” Moss said. “It helps them generate cash and we get the uptick in sales, too. Plus, the local retailer adds some flavor to our sandwich. They add some fun and excitement to the mall.”

Once a company opens a temp store, it’s not uncommon for a location to remain open permanently.

“Owners of the T-Shirt Shop signed a four-month lease here last holiday season and ended up staying the entire year,” Moss said. “And they’re still here.”

Kennedy said that undoubtedly some Toys “R” Us pop-ups will stay open permanently as well, primarily because the current economic situation presents favorable lease rates. The lower rates also drove the company’s decision to expand its pop-up operation.

“We opened 90 pop-ups last year and were pleased with the economic terms we were able to negotiate,” Kennedy said. “Most of our Express stores will remain open through mid-January. We’ll look to keep select stores open through 2011, but specific locations have not been determined.”

Moss sees no end in sight to the trend.

“They’re selling the hot stuff,” he said. “If they can give the customers what they want, they can do it without carrying so much inventory. They only stock the key items, which reduces costs and increases profit. It’s the same principle as the mall kiosk operation — it’s small, but it can hold a lot of stuff that sells quickly.”