
Party City will open about 50 Toy City pop-up stores this year as Toys"R"Us finishes closing its last stores this week following its September bankruptcy. Party City said yesterday it will roll out the temporary locations alongside its Halloween City pop-up shops in "optimal" markets where it found "attractive leasing opportunities." Many retailers have been able to negotiate favorable rents and lease terms because of a glut of vacant stores. The company hopes it will be able to fill a void left by Toys"R"Us’ demise. Companies like Walmart, Target, Barnes & Noble and Five Below are expected to win some share of the market over time, as toy vendors look for other venues to sell their merchandise. KB Toys is also planning a comeback.
Total Retail's Take: I think this is a smart move by Party City. It recognizes a void in the market with the closure of Toys"R"Us, and is looking to capitalize on it by leveraging its already successful pop-up model (see its Halloween City stores for example). By opting for pop-up stores, Party City isn't exposing itself to the financial risk inherent in signing long-term lease deals for retail space. Furthermore, with the well-documented number of retail closures in the past 18 months, Party City should be able to be find itself some bargain as it looks to set up its pop-up stores in currently vacant retail space. And I suspect if the pop-up shops perform well this coming holiday season, Party City will look to convert some of those spaces into full-time locations.
