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Toys "R" Us gained a lot of attention while gearing up for the holiday season in 2010, announcing that it would add 600 temporary pop-up stores to boost sales and get in front of more potential customers. The retailer scaled that back dramatically last year.
In a recent New York Times article about Toys' current troubles, an analyst says that it is still dealing from "hangover" costs from the 2010 strategy.
Of course, that is not the only reason that Toys is having issues. The chain faces intense competition from discounters like Walmart and Target, as well as Amazon.com. Even its Babies "R" Us concept, which seemed like a powerhouse not too long ago, is facing tough times as well.
But aside from Toys "R" Us, what is really the viability of the pop-up store model? On the surface it made sense for Toys, especially if landlords owning distressed shopping centers were giving them breaks on rents.
We guess the breaks weren't big enough, though, if at all, and this experiment's results could set the pace for other large chains. It's one thing to put special concept in the middle of Manhattan during the holidays, but flooding the market with temporary real estate might not cut it.
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