Toys R Us, Pop-Ups, And Gluts

Toys R Us, Inc, announced plans to open fewer temporary 'pop-up' holiday stores in 2011 than the 600 it opened in 2010, although the company did not specify exactly how many it would open.

Just as retailers pushed the pop-up trend by finding cheap rents and opening temporary stores -- an estimated 5000 of them opened last year -- so the revival of rents may lead to the downfall of pop-ups. Landlords figured out that pop-up retailers seek the same spaces year after year, and so increased the rents. As more stores compete for prime locations, the pressure grows for rent increases.

In addition, a pop-up glut spreads the wealth as shoppers choose from among many retailers. Halloween offers an excellent example. Where once an area held one or two Halloween pop-up stores, in addition to the usual year-round department, discount, and party stores, last year's deluge of pop-ups created a glut. If retail dollars slow to a trickle, the return from pop-up operations decreases, and even 'defensive' pop-up stores opened by year-round stores to prevent sales from slipping away lose their luster.