You could say it’s been an eventful year for U.S. retail. In 2015, we’ve seen some of the biggest names – Radio Shack, Gap, Sears, Office Depot and Barnes & Noble – close up shop in several locations nationwide. The real estate carnage is significant: Radio Shack alone leaves 1,784 empty storefronts in the wake of its Chapter 11 bankruptcy.
Of course, when one door closes, another opens for the next generation of retail brands, who are poised to take on the twenty-first century. Just as many former Blockbuster locations have been taken over by gyms like Workout Anytime and Corepower Yoga in recent years, growing retailers such as Mooyah Burgers, Fries & Shakes and Hand & Stone Massage and Facial Spa are eyeing the covetable retail space suddenly made available by high-profile vacancies.
Taking over an existing retail space comes with its own unique set of benefits and challenges. The upside is vacated space usually costs less per square foot than building from the ground up. Of course, with walls, floors and ceilings already in tact, you gain time efficiencies as well. Extra time during the build-out can offer more opportunity to tinker with “phase two” things like fixture placement, product layout, graphics placement, etc. (which may be especially appealing to younger retail brands still mapping out their corporate footprint).
Another benefit to consider: often landlords who have recently lost tenants are desperate to fill vacancies, and may offer incentives to potential lessees such as footing the bill for some tenant improvement costs.
The downside of moving into another retailer’s space is chances are it won’t match the size or shape of your prototypical store, so you will likely have to make some concessions to design and layout, which could also add to your design costs up front. Although many retailers and their designers see the “vanilla shell” as an inspiring blank slate, and turn around their most creative stores to date.
Going into a space “blind” to the nuances of its bones can be tricky as well. We’ve seen clients who take over a seemingly straightforward storefront only to find out months later that the architect didn’t catch a pipe or column, so it’s not incorporated into the plans, and results in issues during millwork installation. Little site modifications can add up to significant extra time and money.
The bottom line? Know what you’re getting into. It may be that the prime location of a vacated space is worth the extra work to make your square peg fit in their round hole. You’ll save time and money in some places, and spend more in others. And in the end, if all goes well, customers will walk through the door and exclaim with wonder, “This used to be Radio Shack?”← Back to all articles