Pop-up Stores Provide Business A Taste Of Mall Action

By Suzette Parmley
The Philadelphia Inquirer

WWR Article Summary (tl;dr) For women in business who are strictly online but want to experiment with a brick and mortar experience, your local mall may be the place to do it.  Some malls are giving entrepreneurs a more affordable opportunity to sell their products at kiosks inside the mall instead of actual stores..

The Philadelphia Inquirer

There was only one King of Pop.

So Joe Purifico wants to be the Pop-Up King.

Purifico is president and general counsel at JBC & Associates, whose mission is to help smaller retailers expand, “utilizing the kiosk, cart, and pop-up store environment” to test a new city and product.

“We take entrepreneur retailers wanting to start a company from scratch, run the operation for them, from sign layout to filling the shelves,” said Purifico, who works in Glen Mills. “Second, we take retailers with a small footprint that malls like and help them grow regionally and nationally.”

Before pop-ups, malls had common areas where people just walked through, Purifico said. Now mall developers and owners get “10 to 15 percent of their annual revenue from pop-up tenants and leases.”

Pop-ups can sprout overnight. They are in the Playground in Atlantic City and were recently tested at Suburban Square in Ardmore. They are temporary gigs that, if they prove a hit with shoppers, can sign on for longer-term leases.

“We’re incubating the retail concept, either in a kiosk or in-line space for a month or two months during the product’s peak sales months,” Purifico said. “We handpick the mall that will be the most successful for the retailer’s product, based on sales.”

So it was with Woops. The upscale bakery set up a pop-up store in Christiana Mall in Newark, Del., in mid-December and has a smaller pop-up at Cherry Hill Mall.

Woops specializes in French macarons — small, circular cakes made of almond flour, egg whites, and sugar, and filled with ganache in various flavors, including cookies and cream (Woops’ top seller), pistachio, and red velvet. It sells other bakery goods and iced and hot beverages. A small chain run by family members, it kept adding stores and ran out of relatives to run them.

Simon Property Group, which owns King of Prussia Mall, liked Woops and wanted it to grow. Simon requested JBC’s services a year ago to help make it happen.

JBC gave Woops what Purifico dubbed the “50-yard line” at Christiana Mall, near the entrance next to Cheesecake Factory and Forever 21, and at the edge of the food court. On a recent Friday, the common area with Woops buzzed with activity.

“We’re one of the first things you see when you enter the mall,” said Woops regional manager Al Sharin.

Woops sells each macaron for $2.75, a box of six for $12.99, and a dozen for $24. Its biggest competitor is a Mrs. Fields in the food court that charges $1.89 per cookie, or four for the price of three.

Woops, which has a dozen stores open, is ambitious. It wants to grow to 200 pop-up stores by 2018 and is relying on JBC to get it there. “We sell a high-end delicacy that’s on the Food Network,” Sharin said. “People like them.”

Rachael Neary, 20, of Springfield, Burlington County, bought a vanilla macaron to split with boyfriend John Parker, 20, of West Chester, last month. She also paid $3 for an iced coffee from Woops. “It was worth it,” Neary said after trying the colorful treat. “It’s really good.”

Woops recently lowered the price for a box of six macarons from $15 to $12.99 and “we saw a huge spike in sales,” said assistant store manager Jessica Mousley. “We are adjusting to our clientele.”

That flexibility is among the pop-up’s advantages, Purifico said.

He’s the former CEO and general counsel of a pair of pop-ups: He spent 24 years at Masquerade L.L.C., which operated as Halloween Adventure and sold costumes, masks, and accessories — and Smart Toys.

Halloween Adventure eventually opened permanent stores in Philadelphia and Manhattan, but it took a while.

“When I asked King of Prussia [mall] in 1992 if I could rent pop-up space for Halloween Adventure, they laughed at me,” he recalled. “Twenty-four years later, it’s now a $10 billion industry.”

Still, Jacob Cooper, managing director of commercial real estate firm MSC Retail, which has negotiated pop-ups for Center City, said they carry benefits and risks.

“Landlords do not like to insert temporary tenants in their space for fear of tying their hands, as well as potential tenants seeing the space as acquired and not looking into renting it,” Cooper said. Also, a six-month lease costs as much in lawyer fees, insurance, and other expenses as a 10-year lease, he said.

Purifico, 69, who holds business and law degrees from Villanova University, ran his own financial consulting firm for 15 years, teaching owners how to start, buy, sell and finance their businesses. Through his years there and running the two pop-ups, he got to know those who later became the heads of leasing and development for all the major real estate brokerage firms and malls.

One protégé, Heidi Cardall, became the head of temporary leasing for her company and invited Purifico to give a keynote speech on pop-ups to 125 mall managers last year.

James O’Neill, who just left Hickory Farms, where he was developing 800 to 900 pop-ups a year, was at the same event and served on a panel with Purifico. The two later compared skill sets and agreed that they were a perfect match for each other and JBC.”We go after a unique product that has the coolness factor,” O’Neill said. Unique “has longer staying power.”

JBC gets paid a percentage of sales. “If the pop-ups don’t make money, we don’t make money,” Purifico said.

He believes that the industry could double to $20 billion in five years because of the emergence of e-commerce.

Typically, an online-only retailer nets 77 cents per $1 of sales, but research shows that it can do better after adding a brick-and-mortar store. The net rises to $1.07 per $1 of sales from saving shipping costs on returned online items and giving shoppers new space to shop or make exchanges.

“E-commerce people are the next big users of this,” he said.

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