A Bona Fide Retail Opportunity for Non-store Merchants, Or Just Another Entrepreneurial Misfire?
“We’re looking at three groups that we’ll define as merchants,” Lee tells me. “Catalogers, Web retailers and brands. All three are somewhat growth-constrained in their current channel. None are in retail, which is where all the dollars are. Therefore, it’s a value proposition for these kinds of companies.”
The Epicenter Collection will provide more than just small retail locales for these kinds of merchants. It’ll also provide a proprietary handheld shopping device for shoppers, called a “SpreeGo,” that’ll enable customers a similar kind of click-shopping ease they’re used to with online shopping. With 60 merchants packed into 181,000 square feet, space will obviously be limited. So although Lee says that some items will be available for customers to take home with them, plenty others will only be showcased and the merchants will ship them at no cost to shoppers.
For cash-poor catalogers scrambling to find ways to mail catalogs profitably and make ends meet with the new punishing postal rates, the new concept could be worth a shot.
As Lee points out, a regular store can run anywhere from $300 to $600 per square foot to establish. And most mall operators require 7- to 10-year leases. Epicenter, however, is allowing merchants to sign leases as short as three years. What’s more, because Epicenter will provide most overhead, Lee claims that merchants’ overall cost is 20 percent what it would run them to set up a typical mall store. “You get store payback on your investment in less than a year,” he pitches. “A regular store takes three to five years for a payback.”
Epicenter’s flagship location is certainly attractive. Christiana Mall, located just off I-95 in the tax-free state of Delaware, draws traffic from shoppers in Pennsylvania, New Jersey and Maryland. It’s anchored by J.C. Penney and Macy’s. And Nordstom has leased a two-level space that it’ll occupy in spring 2011.