'Tis the Season for Pop-Up Shops

Japanese tourists and Londoners crowd outside the Louis Vuitton pop-up shop at Selfridges, jostling to get in. They don't have much time; the space inside the British department store opened in November and will close in January. Offering merchandise like key rings, dog accessories, and handbags, the shop serves not only as a backup for the brand's always-packed permanent space in Selfridges, but also as a lure for new customers who might not normally venture into Louis Vuitton. Earlier this year Jimmy Choo and Edun operated temporary shops in the store, and two weeks ago London jewelry designer Anna Lou opened her market-stall-inspired shop. "Pop-up retail is a different take on the whole limited-edition concept," says Linda Hewson, head of creative for Selfridges. "It causes a stir, then disappears, and people are really fascinated by that."

That fascination has made it the season's hottest trend. Retailers that want to introduce a new product or line open a shop—in spaces ranging from disused warehouses to high-end department stores—for a few days or weeks to generate buzz. And it's that buzz, not the volume of products sold, that counts, says Reinier Evers, founder of Trendwatching.com. "If you combine a pop-up space with limited-edition products, then that is a double sweet spot," he says. The shops sometimes feel like art galleries or theaters. Swanfield, a London consortium of designers that has opened several pop-up shops across the city, often features live performances and art shows in its spaces.

Pop-up, or guerrilla, retail started as a rogue concept by edgy fashion retailers like Vacant, which sells exclusive labels and has opened temporary shops in places like Shanghai, Berlin, and L.A. Target was one of the first mainstream retailers to embrace the concept; the company opened a temporary shop in New York's Rockefeller Center in 2004 to promote Isaac Mizrahi's new line, and since then has developed others, including one in the Hamptons and a floating store on the Hudson River. Other big names followed, including the Gap—which has opened temporary shops in Paris, London, and New York—and the Japanese brand Uniqlo, which opened a few guerrilla branches in Paris this year, including in the department store Colette.

The global economic mess has fueled the phenomenon. "The recession was the tipping point because retail landlords stuck with long leases have to get as much cash profit out of a space as they can, and temporary concessions can be the answer," says Tamar Kasriel, founder of the strategic-consulting firm Futureal.

Now even luxury brands are seeing the allure. "This trend started as an underground thing and did not really fit into what luxury brands stood for, but as it became more accepted, these brands took it on," says Evers. Prada opened a pop-up shop in Paris's Place Beauvau while its flagship store is being renovated. "The store has served as a fantastic platform for our general brand image," says Prada COO Sebastian Suhl. Gucci is opening seven temporary shops in places like Miami Beach, Tokyo, and Hong Kong, and Hermès founded a very successful pop-up concession in London's Liberty this autumn, selling a limited selection of scarves and ties.

Liberty will take the pop-up concept to a whole new level next February when it will swap shops with Paris's ultrahip store Merci; each will open a concession in the other's store. Even whole neighborhoods have gotten in on the action—as part of the Wish You Were Here swap project this fall, 30 independent boutiques in London's Newburgh Quarter and New York's Lower East Side swapped premises. "If you are doing retail the old way, you are going to lose, so you have to be much broader in your concepts but equally selective in the products you choose," says Liberty buying director Ed Burstell. And know when it's time to move on.