Wednesday, January 12, 2005

Kiosks: retail store incubators

Kiosks let retail entrepreneurs test ideas with a small investment. Temporary kiosks and carts have become an important segment of the retail industry, especially during the holiday season. With annual sales of $10 billion, temporary store vendors earn 70 percent to 80 percent of their revenue during the holiday season. What’s more, the ranks of short-term stores swell during the holiday season when shopping centers rent open common spaces or vacant stores to peak-season-only vendors. Operating with a lower overhead than traditional stores, they test the markets for trendy items and holiday merchandise with a short shelf life.

For many startups, a cart provides a foothold into permanency. Mauricio Chediak of B. Fashions operates two fashion jewelry kiosks, with average sales of $18,000 to $20,000 per month at each location. After operating kiosks for several years, Chediak this year has begun to open permanent store locations in area malls throughout South Florida. As a kiosk tenant, Chediak spends $5,500 to rent each cart, compared to $9,000 to $12,000 to rent traditional retail space. A kiosk, he said, "is a great idea for a start-ups. The investment is affordable and you can see if it works."

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