For Detroit, a City on the Mend, Pop-Up Stores Are Spurring Innovation

Joshua Lott for The New York Times Rachel Lutz, second from right, got her retail start with a pop-up store.
Joshua Lott for The New York Times
Rachel Lutz, second from right, got her retail start with a pop-up store.

Detroit, a city famously filled with abandoned buildings and blighted neighborhoods, has a major selling point for entrepreneurs: If you have an idea you want to test, Detroit has the space for it.

A growing number of aspiring merchants are turning empty storefronts and warehouses into experimental labs for temporary businesses. In other cities, “pop-up” shops often house seasonal stores or marketing stunts. In Detroit — a troubled city that hold sgreat appeal for some entrepreneurs — these spaces are the local economy’s incubation chambers.

Joe Posch, 44, was an early pioneer. In 2009, as the recession was killing off his high-end furniture store, he had the idea for a different kind of venture: a small, curated home goods and accessories shop with a masculine vibe. A friend of Mr. Posch’s owned a building with a tiny, unused retail space, so the two struck a deal: Mr. Posch would take over the space for six months and see how sales went.

Customer response was so strong that Mr. Posch brought his shop, Hugh, back for a three-week holiday run, and began thinking about permanent space. That’s when he crossed paths with Hatch Detroit, a nonprofit organization with a very specific goal: It wants to turn promising retail concepts into brick-and-mortar businesses.

Hatch runs an annual contest awarding a $50,000 grant to defray start-up costs. Mr. Posch entered, and won, the 2011 contest, and by late 2012 Hugh was in business as a year-round, six-days-a-week operation. “I think a pop-up should be part of every person’s business plan here, to test the market,” said Mr. Posch, who is now considering expanding to a second location.

When Rachel Lutz, 33, began to wonder if she could make a living scouting vintage clothes and home wares, she decided to start selling and find out. She approached several businesses in her neighborhood and arranged host spaces for after-work sales events. Five of those events generated enough positive feedback — and, equally important, enough capital — to make her comfortable signing a long-term lease for her first boutique, the Peacock Room.

Temporary spaces are often arranged through word-of-mouth, but several of Detroit’s business-development groups have adopted the concept and devoted resources to it. D:Hive, an organization focused on downtown Detroit, runs a quarterly competition that offers the winners several months of free rent and a $1,000 budget to try out retail concepts.

Sometimes, learning what doesn’t work can be just as valuable as succeeding. Lisa Waud, 36, the operator of one of last year’s D:Hive pilot projects, had been running a retail flower shop in Ann Arbor,Pot & Box, for four years before she expanded into Detroit. Her temporary space opened last May. By the time it closed, in July, she had decided not just to forgo opening a retail store in Detroit but to exit the retail business altogether.

“I realized that there are other models for doing business here, and that if I’m beholden to whatever hours I post on my door, I might be missing other opportunities while I’m waiting for sales to come to me,” she said.

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Source: The New York Times | STACY COWLEY

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