Pop-u stores fill void created by recession

Posted on October 31, 2011

In December, some high-end retailers at Somerset Collection in Troy will return to empty storefronts in downtown Detroit for an encore of the CityLoft shops, where retailers will set up for three, possibly four days starting Dec. 1.

Today, young entrepreneur Margarita Barry launches BohoModern.com, a green lifestyle brand of new and vintage items. She will promote the online store by setting up a Midtown Detroit space that will open only for the holidays. It will be across the hall from Barry’s other temporary store called 71 Pop.

And since September, scores of Halloween costume shops have popped up in Metro Detroit, some in spaces that just weeks ago used to be big box stores.

These temporary retail stores are called pop-ups, referring to their almost instant appearance and quick exit. But the once-frowned-upon concept has become a permanent part of the Metro Detroit and nationwide retail scene, analysts said.

“The explanation is simple: The recession. There’s too much vacant space and not enough retailers who can make the commitment to sign long-term leases,” said Ken Nisch, chairman of JGA Inc., a retail strategy and design firm in Southfield that has clients worldwide.

As a result, more popular Halloween st- ores are visible along more major arteries — in the past, they settled for less desirable sites away from corners and heavily traveled streets, said James Bieri, principal at Stokas Bieri Real Estate in Detroit. An example is a Spirit Halloween store at the corner of Big Beaver and Rochester roads in Troy, one of 13 Metro Detroit locations.

There have always been seasonal stores that arrive for the holiday season starting with Halloween. Now, no part of the retail sector turns its back on temporary stores, analysts say. They cannot afford to.

Metro Detroit has 1,737 strip malls, ne- ighborhood and community centers, and the number of empty storefronts in those retail spaces has remained stubbornly in the 15 percent range all year, according to CoStar Group, a commercial real estate information firm.

That’s a rate “no one is comfortable with,” Nisch said. So there is a full embrace of the pop-up store.

In the suburbs, the temporary stores often appear in the spaces of a major chain that did not survive the recession.

“There’s still some (shopping centers) trying to fill the former Circuit City and Blockbuster spaces,” Nisch said. Electronic retailer Circuit City closed the last of its stores in January 2010, while Blockbuster has shuttered hundreds of outlets since it filed for Chapter 11 bankruptcy in September 2010.

Many pop-up stores will be gone by Tuesday, the day after Halloween. In some locations, temporary stores catering to Christmas and other holidays will fill those spaces.
Pop-ups are not the long-term solutions for owners of malls and other retail sites, Nisch said.

“Banks still don’t view temporary stores as reliable income to the property, so it doesn’t help the lending crunch,” he said. “And for shopping malls, pop-ups usually pay a flat fee” — not the maintenance and other fees that help the upkeep of the mall.

Pop-ups are so common that retailers routinely sell them as exclusive events that can help launch a brand or reach a new audience, Bieri said.
He points to Somerset Collection’s CityLoft experiment, which initially ran during every Thursday, Friday and Saturday toward the end of July, August and September.
“I thought that was ingenious because Somerset is the epitome of luxury shops,” Bieri said. “Because of that, it gets a very unique audience.”
Many of Somerset’s stores are the only ones in Michigan for that particular retail chain, he added.

In Detroit, several small entrepreneurs have used the pop-up for everything from to a beer garden to events featuring the work of local food vendors and musicians.
Margarita Barry, 26, founded 71 Pop in August with the idea of setting up a somewhat permanent space in Detroit where she could showcase a revolving set of local designers and artists. Each month, three or four artists are selected.

There’s always a launch party where each artist unveils their wares — on the same block as the Museum of Contemporary Art Detroit.

Barry plans to do 71 Pop for one to two years and then open a permanent retail space. In the meantime, 71 Pop is offering invaluable lessons, she said.

“It’s a good chance for me to learn whether I really want to run a brick-and-mortar business,” Barry said. “What are the price points that work? What does the community want? The pop up idea is offering me a great chance to learn.”

Louis Aguilar, Detroit News