Pop-Ups Gain Traction in Retail Sector

Some of the priciest shopping districts are experimenting with pop-ups, offering retailers discounts to test the waters before they fully buy in. The pop-ups are temporary stores that can give retailers a feel for the space and the business they could generate, but at a fraction of the cost since the leases tend to be only a few months. Landlords hope the retailers will then decide to become long-term tenants. The pop-ups are also opening the door to more startups to jump in.
In Manhattan, landlords are increasingly turning to pop-ups as the retail market there softens.
“This kind of phenomenon only comes when there is a considerable amount of availability,” Joanne Podell, a vice chairman at real estate services firm Cushman & Wakefield, told The Wall Street Journal. “Now, there’s a proliferation of them.”
Retailers are showing greater desires for shorter leases and are becoming more leery about adding stores due to the rapid competition from online shopping, Greg Portell, lead partner in consulting firm A.T. Kearny ’s retail practice, told The Wall Street Journal. But even with the proliferation of online shopping, many retailers still consider it important to have a brick-and-mortar operation too.
For example, Everlane, a fashion brand, describes the company’s approach as “digital first” but opened a pop-up in SoHo last spring and another one a few months later in a different location within Manhattan.
“Not only is the retail real-estate market down, but we are finding that as more landlords understand the concept of temporary shops, they are becoming more comfortable with shorter-term leases,” Everlane founder and chief executive Michael Preysman said.
By: REALTORMag
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