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November 4th, 2009Pop-up shops fill short-term niche

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by Jackie Crosby
StarTribune.com

With malls and shopping centers staring at record vacancies, the lowly pop-up store is making a comeback. And it’s no longer limited to the fly-by-night store, as major chains try to wisely spend the cash they do have.

Toys ‘R’ Us just opened 80 temporary stores across the country in an aggressive play for the holiday toy shopper. Splashy fashion brands like Gucci and Gap are using temporary stores to market new product lines. And for the first time in years, mom-and-pops are getting a crack at prime real estate at affordable prices.

“At one time there was no way a small start-up could gain space in a regional center and get that exposure,” said Paula Mueller, general manager of Northtown Mall in Blaine. “Now there’s more space, and there’s better space.”

The retail vacancy rate in the Twin Cities is 7.1 percent, according to Colliers Turley Martin Tucker, and the short-term outlook isn’t encouraging. In the past year, national chains such as Circuit City, Linens ‘N’ Things, KB Toys and Ritz Camera have gone bankrupt. Many others, including Zales jewelry, Talbots, Starbucks and Regis-owned hair salons, have shuttered hundreds of stores.

The glut has given merchants more choices, better locations and an edge at the negotiating table with landlords who are highly motivated to keep as many lights on as possible.

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