Squeezed by pricey real estate, Boston retailers bank on pop-up shops | Crain's Boston

Squeezed by pricey real estate, Boston retailers bank on pop-up shops

“Come inside and see a real American Rhino,” a sign beckons passersby on Newbury Street.

“Is that like American Eagle?” quips one skeptic strolling by on a recent Friday afternoon.

Most would-be customers of Newbury’s newest pop-up shop know there’s no such thing as an American Rhino. But Ryan Saunders hopes the gag will pull a few customers down the steps to the American Rhino store in the garden unit of a brownstone on Boston’s iconic retail strip.

“There’s a lot of foot traffic. It’s very different than being just online or on the North Shore,” said Saunders, the company’s vice president of operations and product development. “That’s awesome because nobody knows who we are yet.”

Founded in the suburbs last year, American Rhino is an apparel store that donates a portion of its profits to rhino conservation in Africa. Much of its business is online, Saunders said, but pop-ups in Lynnfield and Boston are helping the young company build a brand without having to grapple with an extended lease on pricey real estate. Saunders said the three-month lease American Rhino has on Newbury Street saves several thousand dollars in rent each month compared to a longer-term stay.

Pop-ups are becoming increasingly common in Boston, where soaring real estate prices have put traditional storefronts out of reach for many smaller local companies. They’re also popular for celebrities like Kanye West and other global brands who use the cachet of a temporary shop with exclusive deals to drive sales and generate buzz.

Saunders said that’s even true for smaller companies like his. Customers who gravitate toward American Rhino’s kikoy—brightly colored cotton wraps from Kenya—for example, might be more likely to make a purchase if they think it’ll be their only chance.

The arrangement is good for landlords, too, who may be happy to cut a deal for temporary tenants that fill a gap between longer leases. American Rhino’s temporary digs formerly housed True Religion Jeans, which filed for bankruptcy in July. A restaurant will move into the space in January, Saunders said.

Jon Hurst, president of the Retailers Association of Massachusetts, said pop-ups have been a feature in Boston since the recession. But lately, he said, they’ve become ubiquitous.

“It always been in malls with carts and kiosks, but now it's on main streets, it's everywhere,” Hurst said. “Times are tough. It's a natural stopgap measure by both sellers and landlords to avoid dark storefronts.”

Newbury Street in particular has taken advantage of the model to keep up its appearance as the city’s premier destination for strolling shoppers, be they locals or out-of-towners. Besides American Rhino, other pop-ups on Newbury Street this fall include Of MercerCuyana and MM.LaFleur, all of which sell upscale clothing for women.

“I’d like to see more of these pop-ups stay,” said Michele Messino, executive director of the Newbury Street League. She said there are plusses and minuses for the area as a business district. Pop-ups cuts down on vacancies—increasingly common as rents in Boston remain among the highest in the nation—and could be a foothold for small businesses hoping to become permanent fixtures, said Messino.

On the other hand, she said, “if they fail it could send a bad message, that you can’t make it on Newbury Street.”

Other local enterprises turn to pop-ups not just for a discount on rent, but because it serves their business model. The nonprofit More Than Words teaches job skills by putting local young people in charge of small bookshops around Boston. Increasingly that means one-day pop-ups in the lobbies of office towers or grocery stores.

“It’s become quite an integral part of our model,” said Jennifer Herbert, the group’s chief operating officer.

When More Than Words moved from the suburbs into Boston in 2011, Herbert said, it was focused on online sales and outreach. But the nonprofit quickly turned to pop-ups as a way to grow quickly and build personal relationships with their customers.

“It gave us the opportunity to get out into the community,” Herbert said. “It was a way to get our name out there.”

American Rhino, for its part, would rather be permanent. But for now, Saunders said, business is good.

“The dream is to have a bunch of locations,” said Saunders. “The flexibility of a pop-up is a huge asset."

October 8, 2017 - 1:20pm