It's a low-risk retail experiment: opening a temporary store to test a new concept or build buzz for an established brand.
With the holiday season right around the corner, the pop-up store phenomenon is on the upswing. It's a perfect antidote for a struggling economy that has seen retail vacancies rising everywhere from strip centers to regional shopping malls.
"You don't want the stigma of a property being empty for too long," said Christina Norsig, founder of Pop-Up Insider, the first national online exchange for pop-up real estate, which attempts to match retailers and landlords. "When a store is animated and full of people, it's much more desirable than a concrete box that's sitting empty."
There's something exciting about a store that's only around for a matter of weeks. This summer, Gap-owned Piperlime used a New York City location to bring life to the online brand, and Pop-Tarts generated a buzz with its Times Square opening. They both followed the lead of Target, which has been a national trendsetter with the concept.
But a sign the pop-up has gone mainstream is that Toys R Us plans to open 600 Toys R Us Express stores this holiday season and an additional 10 temporary stores featuring the FAO Schwarz brand.
CEO Jerry Storch says if the stores generate enough sales, many of them will continue beyond the holiday season. Last year, Toys R Us kept about one-third of its almost 90 holiday locations.
The temporary stores give Toys R Us a much broader reach, doubling the brand's number of locations nationally.
Robert Garcia was surprised when he stumbled on the Toys R Us Express recently at Dolphin Mall in Miami. Although the Express stores carry a limited assortment, they also carry unique products.
"They've got a lot of stuff that other stores don't have," said Garcia, 33, who lives in Doral, Fla., and collects Transformers. "I'll definitely be coming here more often. It's a lot more convenient for me."
In many cases, the Toys R Us locations are filling a void that has been missing at the malls after KB Toys went out of business in 2009.
"The pop-up is a way to keep that use for our shoppers," said Jory Thomas, assistant general manager at Aventura Mall in Aventura, Fla., which kept its Toys R Us Express until this summer and was selected to host an FAO Schwarz this year. "They would like to go permanent here, but we just didn't have the space for them."
Space is available
That's why temporary holiday tenants like Spirit Halloween have had no trouble finding vacancies this year, whether in malls or local shopping centers. The company expects to have 850 stores nationally.
"The last couple [of] years, we have benefited from a greater number of large box stores being open across the country," said Kevin Mahoney, general counsel for Spirit Halloween.
Temporary tenants pay dramatically less rent than permanent occupants.
But everything comes with a price. Temporary leases usually contain a provision that a landlord can kick the tenant out with either a few weeks or a month's notice.