Small-Format Mall Concept Creates Retail United Nations In NYC

CF Toronto Eaton Centre
HiO Toronto
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HiO, a small-format mall concept, will open its first space in Acadia Realty’s City Point shopping complex in Brooklyn, N.Y., according to CNBC. The space will feature nine retailers, including eight international brands, and serve as a test to see whether the concept can draw in shoppers with its unique assortment of companies.

Makeup brand Winky Lux, which was founded in New York City, will be the only U.S.-native retailer. The participating international brands are:

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International retailers have been hesitant to expand to the U.S. because of the recent wave of store closures and bankruptcies, according to Steve Garcia, Co-Founder of HiO and Founder and CEO of SGN Group. The company is a subsidiary of Direct Brands group, which was formed in 2017 to help international brands interested in creating brick-and-mortar presence in North America.

The other co-founders are Larry Meyer, former CEO of Uniqlo USA and EVP of Forever 21; David Zoba, former Head of Global Real Estate at Gap; and Herb Kleinberger, Lead Retail Consultant at PwC.

“There are concepts in the Middle East and Asia…making it easier for foreign brands to come into the country, but that hasn’t existed in the U.S.,” said Meyer in an interview with CNBC. “Our goal is to provide that background, making it easier for retailers to get a start and facilitating incubation as businesses evolve, and as the margin structures are more clear.”

The initial HiO space will be approximately 1,900 square feet in size, but 5,000 square feet would be a better size for future locations, according to Garcia. The goal of these small-format malls is to offer shoppers an element of discovery and surprise, for example by featuring brands that can’t be found elsewhere, which gives consumers a reason to visit a physical store rather than shop online.

The company is working on opening additional locations in North America later this year, with a focus on urban markets, as landlords seek to refill empty spaces. Real estate companies including Taubman and GGP have expressed interest in the concept.



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