Lourdes Juan was faced with an economic downturn and rising rent, so she left her brick and mortar for a pop-up shop. Now, business is booming
Lourdes Juan was feeling the financial pressure from all sides.
Like many small businesses, the Calgary-based spa she founded, Soma Advanced Skin and Body Therapy, was hit hard by plunging oil prices. “We definitely saw people tighten up on their spending,” says Juan.
While she was able to maintain her loyal customer base, many of her clients were cutting back the frequency of their treatments and opting for cheaper packages. And then she was told her rent was going up when the building that housed her storefront sold. “The increase in our operating costs was extravagant,” Juan says. Something had to change, and there was no way it was going to be her profit margin.
So Juan struck a three-month deal with Holt Renfrew, and in July, she started running her business out of the cosmetic section in the high-end clothing retailer’s downtown Calgary location. It’s called a pop-up shop, and it’s becoming increasingly common among small businesses as they look for new ways to improve profit margins and generate interest in their products and services. Both Soma and Holt Renfrew benefit by sharing customers; Juan says she’s seen an increase in traffic. And on top of that, her rent is now more reasonable. Instead of a flat, monthly fee, Juan’s rent is based on her revenues. She wouldn’t say exactly how much it costs her to operate out of Holt Renfrew, but says the rent for pop-ups is usually somewhere between 15 and 25 per cent of sales.
However, Juan says the pop-up model has its difficulties. Sharing treatment rooms with Holt Renfrew’s cosmetics department can be logistically complicated, for example. And then there’s the issue of differentiating Soma from the Holt Renfrew brand. “I think the challenge becomes addressing your brand within another brand,” she says.
But, the pop-up model has been good for business. Shortly after her Holt Renfrew debut, Juan opened a second pop-up Soma in Angles Hair & Aesthetics in the Strathcona district. That success caught the attention of the Marriott Hotel. She’ll be opening a permanent storefront in the Marriott in Southeast Calgary this fall.