Taubman’s Pipeline for Pop-ups

David Moin
·6 min read

An eclectic mix of pop-ups has been gaining ground at Taubman Centers, the real estate investment trust that owns, leases and manages shopping centers and malls in the U.S. and Asia.

At the Beverly Center in Los Angeles, a temporary gallery for contemporary Black artists, called Heirs to the Throne, launched last December and renewed its agreement to stay on through 2021.

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Boll & Branch luxury bedding took over the former BCBG store at the Mall at Short Hills in New Jersey, initially with a six-month deal that’s now been extended. Also in the mall, the Peloton brick-and-mortar space, originally a pop-up, has evolved into a permanent store.

At the Mall at Green Hills in Nashville, Tenn., the Calia by Carrie Underwood women’s athletic apparel brand had a pop-up housed in a mobile retail unit for two months in the fourth quarter of 2020.

And over the last few seasons, Taubman has attracted pop-ups for Athleta, Bogner, Beretta, Christina Lombardi, Elle B. Zhou, Hot Topic, Jessica Rich, Gucci, Michael Aram, Miniso, M.M. LaFleur, Monica + Andy, More Dash, Sunflow, Tyche + Iset, United Nude and Venus Et Fleur.

Among the more unorthodox pop-up formats, in October 2019, Tamara Mellon, cofounder of Jimmy Choo, converted a bus into a three-day showcase for her namesake footwear brand at the Mall at Green Hills. She captured $30,000 in sales. Even Lufthansa operated a pop-up in International Plaza in Tampa, Fla., for just two days.

“We want to separate ourselves from everyone else, to show what we can do for brands very quickly, with a lot of ease and a lot of support,” said Lori McGhee, Taubman’s vice president of specialty leasing.

McGhee leads the company’s “Emerge With Taubman” platform for pop-ups, along with Amy Higgins, manager of new business development. They bring in expertise from Taubman’s marketing, public relations, operations, customer research and store planning functions to help tenants who have not previously operated in brick-and-mortar.

“We pick and choose the right markets for these brands and we do a lot of the physical work for the space,” McGhee said.

The accelerating pop-up trend at Taubman reflects the increased availability of space in shopping centers due to store closings and retail bankruptcies. It also indicates the company’s drive to maintain high productivity rates by filling vacancies and showcasing new concepts, as well as a realization by digitally native brands that a brick-and-mortar presence can fuel business online.

The occupancy rate of Taubman’s U.S. centers at the end of the third quarter, which concluded on Sept. 30, 2020, was 89.9 percent, down 2.7 percent from a year ago, largely due to tenant bankruptcies related to COVID-19. The Simon Property Group owns 80 percent of the Bloomfield Hills, Mich.-based Taubman, though Taubman, with its 26 shopping centers, continues to operate independently.

Since Emerge With Taubman was established three years ago, it’s been relaunched and refined. The platform was started by McGhee as a way for local businesses to take space at the Twelve Oaks Mall in Novi, Mich., a suburb of Detroit, without the obligation of a long-term lease. A 2,400-square-foot space at Twelve Oaks called “Emerge” housed four to five local brands. It’s since closed down but might reopen in the fall.

Last year, an Emerge With Taubman website and social media campaign were launched; efforts to attract direct-to-consumer, e-commerce and legacy brands were amplified, and the focus was directed toward placing pop-ups at a handful of Taubman’s premier properties: the Mall at Short Hills, Beverly Center, International Plaza, The Mall at Green Hills, and Cherry Creek Shopping Center in Denver. Last November, Taubman signed a licensing deal extending through January 2022 with Leap, a New York-based consulting firm that helps brands open and operate stores, to curate pop-up spaces at Taubman centers, including the Radley London women’s handbag and accessories brand at the Mall at Short Hills.

“Emerge With Taubman was launched a couple of years ago, but we started putting different pieces of the puzzle into place in late 2019,” McGhee said. “Due to the change in the environment, we had to re-tool along the way,” she said, referring to the impact of the pandemic.

Taubman’s traditional leasing activity entails long-term leases, generally five to seven years taking six months to a year to finalize. The pop-up platform focuses on short-term leases, a year or less, though often the goal is to help brands become permanent regional and/or national retailers over time, where it makes sense for both parties.

For those brands that never had physical stores, “We’re holding their hands in terms of visuals, with the layout of the store, painting the space, adding signage and the right fixtures. We’re providing a space that’s move-in ready,” McGhee said. In some cases, Taubman will cover certain costs, but each agreement is different.

The pop-ups are arranged through licensing agreements, rather than leases. The agreements don’t require the work of lawyers to pour over them and can be as short as seven pages, while leases can be 90 pages long or longer. The licensing agreements protect brands from being kicked out of their space in favor of other brands that might be seeking long-term leases, which would be more lucrative to the landlord. These pop-up agreements can be signed within a couple of days, and tend to range from 500 to 3,500 square feet, McGhee said.

According to McGhee, the agreements contain flexible terms, enable brands to enter healthy markets with less financial risk, and in many cases they can be situated alongside established tenants resulting in good foot traffic and exposure. It’s a way for emerging or digital-only brands to test the retail waters without expertise in retail and with a limited commitment and risk.

“There are times when we actually help with the buildup, the signage, the fixturing, the visual merchandising, the layout, dressing rooms and merchandising the windows. We do try to help as much as possible to expedite the process,” McGhee said.

Opening a pop-up is a limited investment for the brand. “We want to make it as easy and seamless and stressless to launch their first store, or what could be the first of several,” McGhee said. She characterized rents as “reasonable” without providing details.

“When these brands open a pop up, they see an uptick in their business on the Internet,” said McGhee. “Since COVID-19, we have seen more brands reach out to us. We saw a huge uptick in interest in the fourth quarter.”

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