Pop up shops bounce into malls as short term leases benefit retailers, landlords

TORONTO _ For the second year in a row, a shop selling dolls with back stories that celebrate Canada popped up for a limited time in a Toronto mall.

Last year, Maplelea Girls’ shop at Promenade Mall boosted sales to the point other industry insiders “were really quite surprised at what we managed to do at that mall,” says Kathryn Gallagher Morton, president of the doll maker.

This year, she’s extended her pop-up at Yorkdale Mall through March to ensure families can visit it during spring break when there’s leftover Christmas gift money to spend.

It’s one of several pop-up shops appearing around the country as the trend towards short-term tenants occupying mall space usually reserved for bigger brands grows. The arrangement presents a win-win situation for entrepreneurs and landlords, who experts say both stand to benefit by being able to try-out limited-time shops.

Top Canadian malls are increasingly hosting these kinds of stores, according to the Retail Council of Canada’s study of the country’s shopping centres, which was released last month.

“I believe we’re going to see more and more of that in key malls across the country,” says Diane Brisebois, the council’s president and CEO.

Oxford Properties Group, for example, hosts five to 10 such shops
in each of its malls annually, wrote Brad Jones,
senior-vice-president of retail, in an email.

At pop-ups, retailers can expose their products to new customers, who may not find them otherwise.

“We certainly get new customers who have never come across us before by being in places … unexpectedly,” says Jen Lee Koss, co-founder of Brika, which sells jewellery, clothes, toys and other knick-knacks made by artisans.

Brika, which started out selling online in 2012, has since opened two permanent locations in Toronto and hosted a number of pop-ups, including a short-term location at the city’s Yorkdale mall this year and last.

If a company’s target customers shop at malls, pop-ups can offer a lower-cost alternative to reaching them than a lease with a longer commitment, says Becky Reuber, a professor of strategic management at the University of Toronto’s Rotman School of Management.

These shops also allow online retailers without any brick-and-mortar stores to put their products in front of customers.

Maplelea Girls, which aside from pop-ups only sells its dolls online, found their sales increased once shoppers were able to view the dolls not just through a computer screen.

“Once they’ve seen and touched and felt it, they have the confidence to buy online,” Gallagher Morton says.

Companies like Maplelea Girls and Brika can also take advantage of their best sales seasons without the commitment of a lengthy lease.

“In the toy business, most of your sales are done in the six weeks before Christmas,” says Gallagher Morton, “and so that’s when you want to be there.”

The malls, too, benefit from these stores’ presence by being able to experiment with their tenant mix, says Reuber. Pop ups can help malls determine whether a store is well-received by shoppers before committing to a longer lease.

Stephen Yau, vice-president of national leasing for Cadillac Fairview, said in an email that the goal is to transition these tenants into long-term ones, something it has done with several already, including the shoe seller L’Intervalle.

It also allows malls to generate excitement. Oxford Properties’ Jones said these shops help boost traffic at its malls because they provide shoppers with something new on every visit.

“In our modern age of on-demand fashion trends, the pop-up format might just be the modern on-demand solution,” he said.

Both Brika and Maplelea Girls plan to continue hosting shops via the pop-up format.

“There’s definitely more room for online,” says Lee Koss. “But I think that offline will always be, like, one of the legs in our stool.”