Cautious retailers looking to grow their store portfolio but worried about the impact of the current slow-paced marketplace have been urged to consider opening pop-up shops.
Managing Director of CTS Retail Scott Storey said this store format, which is often used to good effect by entertainment retailers and gift specialists in the build-up to Christmas, allows businesses to trial new locations, products and designs without the need for huge investment.
Advice for retailers, whether it be from industry suppliers, insolvency firms or other business representative groups, has been prevalent in the last two weeks as a plethora of companies have fallen into administration or admitted they are struggling.
The demise of renowned retailers such as Jane Norman, TJ Hughes and Habitat, as well as poor trading statements from HMV and Carpetright and the announcement of a store closure programme from Thorntons, may have made other businesses on the high street wary about expanding their property portfolios.
“Pop-up shops are different, exciting and can be an extremely great way of trialling market demand before committing to full-blown store rollout,” Storey explains.
“The volatile nature of the high street means that there are many opportunities to gain further presence which may seem too good to miss out on, but the reality is that the previous retailer who occupied that position failed for a reason, and it may not be purely due to the brand itself, or poor management of the business.
“There may be external factors that will influence success that a new retailer simply would not be aware of.”
Franchises could also become more popular as companies look to improve their bottom line, and this is one of the strategies Thorntons is set to follow after announcing it would be closing at least 120 of its own stores over the next three to five years.
The chocolate specialist already has over 200 franchises, but these stores will become an even more important part of the business in the years to come after CEO Jonathan Hart admitted that action needed to be taken in light of the continuing decline in sales at the stores it owns.
Shaw Stapely, part of the corporate commercial team at law firm Thomas Eggar, believes it is a wise move by the company.
“What this approach means for Thorntons is that it will reduce company overheads and should protect jobs if current store operators are prepared to invest the time and capital to become franchisees,” he said.
“This investment will of course also bolster Thorntons’ bottom line. The increase of its franchise estate should also maintain Thorntons’ high street presence and customer goodwill.”