- The Washington Times - Monday, April 28, 2003

Specialty kiosks and carts scattered throughout the halls of shopping centers are no longer an afterthought for developers. The temporary tenant space once occupied with Christmas ornaments and holiday stocking stuffers has turned into a $10 billion annualbusiness as mall developers try to fill the common areas at their centers.
"It's a very big revenue source for the center," said Bill Anderson, a Frederick retail consultant specializing in temporary tenants. "Fifteen years ago the common area was wasted space."
Now developers are filling up the space with services and trendy products. The retailers are selling everything from jewelry, sunglasses, bamboo plants and food to T-shirts, bathtub fitters and massage therapy.
"It's 360-degree exposure," said Anita Saleh, vice president of specialty retail at Taubman Centers Inc., which owns and/or manages 30 shopping centers including Fair Oaks in Fairfax and Lakeforest in Gaithersburg.
Retail officials say the tiny temporary stores are low-risk because business owners sign a lease that locks them in for no more than a year or as short as weekend, depending on the developer.
In contrast, to open a storefront at a mall a retailer has to commit to a long-term lease, invest in the interior design of the store, stock up on inventory and find employees, said Gary Yanosick, vice president of business development at General Growth Properties Inc., which owns and/or manages 159 shopping malls including Tysons Galleria in McLean and Landmark Mall in Alexandria.
In a weakened economy, specialty leasing tends to spike as retailers turn to temporary opportunities instead of locking in to long-term leases. In other instances, entrepreneurs want to try something new.
"When the economy is bad, my business is booming," said Deborah Georgetti-Piro, vice president of main-street retail at Mills Corp., an Arlington real estate investment trust that has nearly 30 properties, including Potomac Mills and Arundel Mills. "Business has been good this year for the specialty-leasing end. Permanent leasing is struggling overall."
Some retailers that are usually permanent tenants may not spend the money and risk a long-term lease because of the shaky economy, she said. As a result, more permanent locations are available for temporary stores to fill until long-term lease holders are found.
Temporary tenants, however, are subject to be moved or terminated, especially if a permanent tenant comes along, Mr. Anderson said.
"It's the nature of the business it's temporary," he said.
On a stroll through malls in the Washington area, consumers are faced with the hottest trends such as rice jewelry which has a magnified glass vial that contains a personalized grain of rice or Italian charm bracelets made of flat links that can be popped on and off.
"We basically try to look for merchandise voids within our malls and fill them with carts," Ms. Georgetti-Piro said.
Mills has about 40 carts at its mega centers. Traditional malls have between 20 and 30 sites, said Ms. Georgetti-Piro, who worked for other mall developers before joining Mills earlier this year.
In many cases, the majority of kiosks and carts are owned by local entrepreneurs.
It's an attractive business opportunity because "their hands aren't tied to inventory or the expense of maintaining a store," Mr. Yanosick said.
Aqua Massage International brought its massage device to malls four years ago, starting out in two or three centers in Florida, said Jane Templeton, executive assistant at the Mystic, Conn., company. Now Aqua Massages, owned by individual entrepreneurs, are in 200 malls with usually two at each location.
"It's grown by leaps and bounds in the last two years," Mrs. Templeton said.
The $30,000 device, which looks like a tanning bed, allows users to get a full-body massage from pulsating water jets while staying dry and fully clothed.
Mrs. Templeton says putting the devices in common areas gives them greater exposure than being tucked away in a store.
For national retailers or nationally known brands, temporary tenant space is another way to get in front of potential customers.
Tupperware used to sell its products only at parties through sales consultants, but the company expanded to mall kiosks as a seasonal test run in November 1998.
"We needed to gain access to consumers who liked our products but didn't want to go to the parties," said Jane Garrard, vice president of investor and public relations at Tupperware.
Tupperware now has 200 to 250 kiosks throughout the year, with that number growing to about 500 units during the holiday season.
"Being in the mall has been effective," Ms. Garrard said. "We have strong brand recognition that draws people to the showcases."
Each Tupperware kiosk is run by a local sales associate and offers between 80 and 90 products, she said.
Some retailers that typically lease storefronts have turned to temporary space to capitalize on their own trendy products, get exposure somewhere else in the center or have a mall presence without signing a long-term lease.
National companies such as Starbucks and Auntie Anne's have expanded their products to kiosks.
Sharper Image has turned to kiosks to sell its Ionic Breeze Air Purifier in centers where they are not located in large stores. The consumer electronics store has a kiosk in Fair Oaks, for example, but does not have a permanent store there.
Fair Oaks' other 20 temporary retail tenants include Tupperware, cell phone vendors, bamboo plants and jewelry, to name a few.
"We want to make sure the mix is viable," said Phil Morosco, general manager at Fair Oaks. "We don't want to bring in products that aren't going to sell just to fill up space."

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