‘Popup’ Stores Prop Up Retail; Halloween Stores Kick Off Holiday Season

BOSTON—It is mere weeks now until All Hallows Eve comes to pass, and in the retail business, that means the beginning of the ‘popup’ season—short term lease stores— which have seen a dramatic increase in volume since the recession hit in 2008. The proliferation of Halloween-themed popup stores began in mid-September and will segue directly into the Christmas popup vendors, providing landlords an infusion of cash, and fellow tenants with increased energy and traffic in the shopping centers over the next three months.

“Pop ups have always been around, but in smaller numbers,” observes Robert Sheehan, VP of Research for Burlington-based KeyPoint Partners. “The current trend started when the economy turned down, (but) it will be interesting to see if it holds up when vacancy levels get back to normal.”
Landlords of former Borders stores have been one of the main beneficiaries of the Halloween popup frenzy. Dedham-based iParty is leasing 27,000 sf at the former Braintree location; National franchise Spirit Halloween (a subsidiary of mall retailer Spencer Gifts) opened one of its 900 popups in the 22,000-sf Mansfield Crossing; and Halloween Express is occupying 25,000 sf at Legacy Place in Dedham. That homegrown operation is a subsidiary of Pembroke-based Itzaparty/Party Needs. Spirit Halloween will open at least 25 locations in eastern Massachusetts alone, iParty announced plans for 11 popup stores in New England, and national franchiser Halloween Express has at least three in Massachusetts. There are a number of smaller independent operators as well.

With so many Halloween store operators looking to set up shop in malls, and so many landlords looking to fill so much vacant space, who is looking out for the best interests of shopping centers current tenants? “Although the goal is to keep space occupied, we’re very careful about who we (lease space to),” says David Fleming, corporate marketing director for WS Development. “We vet our operators very carefully.” The entity owns and operates 33 shopping centers in Massachusetts (including Legacy Place) and another 11 in New Hampshire. WS Development has four Halloween popup operators at its shopping centers – five in Bay State locations and one in New Hampshire. Two are longtime local operators, one is a national franchise, and the fourth is the aforementioned Spirit Halloween.

Despite the widespread trend, many retail brokers spoken to report having little experience with leasing popups. “We haven’t done any tenant work on popup stores, or even any on the landlord side that I’m aware of,” says Todd Alexander, retail broker and VP at Colliers International. “But (that may be) because the vacancy rates on our ‘A’ properties are so low.” Steve Green, owner of Halloween Extreme and CEO of Itzaparty, says he secured the Borders location at Legacy Place through an “existing relationship with WS Development, but we have used brokers like CBRE|Grossman Retail Advisors in the past as well.” Itzaparty has five units in the South Shore region.

And while some high-end stores may not relish the idea of a Halloween popup store in close proximity to their clientele, many retailers value the increased traffic it brings to their stores. “It’s going to vary” said Michael Tesler, Chief Operating Officer of Retail Concepts, a retail consulting firm based in Norwell. “The landlord probably wouldn’t do anything (that would hurt) a long-term tenant, and most tenants would rather see spaces occupied and the busyness around than to see vacant space with ‘for lease’ signs on it.”

After Halloween’s crop of stores dries up in November, spaces will be filled by Christmas popups like Toys “R” Us, The Gap, and a host of independent shops. Toys “R” Us spokesperson Meghan Kennedy tells The Real Reporter (in response to missives that the chain would be cutting back on popup stores this season) that the company will operate four Toys ‘R Us Express stores in the Boston market, including emporiums at the Square One Mall, South Shore Plaza, Meadow Glen Mall and Wrentham Premium Outlets.

And what will happen after the holiday season closes? “The current economic situation is giving a little more leverage to the retailers where they can test (stores) with pop-ups,” says Tesler. “If the retail space is 98 percent occupied and leverage is back with the landlord, then there won’t be much opportunity to do it. But (pop-up stores) are not going to come to an end if the real estate market gets tighter, there will just be (fewer) Halloween stores.”