Dreams Incubate in Shopping Mall Carts
Saturday, December 24, 2005
Ertac Gungor stood near his kiosk in Tysons Corner Center, watching as a woman wearing a maroon headscarf thumbed through the pillowcases, copper earrings and scarves that fill his kiosk. "Everything I sell is from Turkey," he said.
Gungor came to Fairfax from Turkey's south coast four years ago after visiting the Washington region on a vacation. During that trip, he noticed the ethnic diversity of the mall kiosk vendors and their wares but did not spot anyone from Turkey.
"I am thinking, 'I am opening here, too,' because Turkish handicrafts are rich," Gungor said in halting English.
Scattered among the malls packed with holiday shoppers are kiosks filled with sunglasses, purses, jewelry and more exotic products. New carts have recently appeared, selling ornaments, candy and other seasonal items. Owners of these small businesses hope to lure some of the shoppers rushing to buy gifts at retail mainstays such as Gap, Ann Taylor and Bloomingdale's. And as Gungor noted, many of these kiosks are owned by immigrants.
In Tysons Corner Center, about half the 40 kiosk owners are from other countries, according to mall management. Immigrants also operate numerous kiosks and carts at the Mall at Prince George's in Hyattsville, Westfield Shoppingtown Montgomery and other regional shopping centers.
Nationally, about 25 percent of the more than 50,000 carts and kiosks in shopping malls are owned or operated by recent immigrants, according to figures compiled by Patricia Norins, a kiosk consultant and publisher of the trade magazine Specialty Retail Report.
Immigrants began opening mall kiosks in large numbers in the early 1990s, Norins said. At that time, Indian, Chinese and other South Asian and East Asian immigrants were the largest groups. In recent years, the number of immigrant kiosk owners from the Middle East has grown, she said.
In many shopping centers, small retailers can open a kiosk for as little as $5,000, which generally covers the price of renting the cart and purchasing the merchandise, according to kiosk owners and Kathy Hannon, senior property manager for Macerich Co., which runs Tysons Corner Center. To open a kiosk, an entrepreneur must present mall managers with a proposal outlining what they will sell and why it will work in the mall's marketplace. Hannon said immigrants can often import unusual goods inexpensively from their home countries.
Once a proposal has been approved, most shopping centers require a security deposit and the first month's rent for the cart. Kiosk operators often can commit to rent the cart for as little as three months. Norins said profits earned from kiosks vary greatly. Most kiosk owners sell products for about $20 and mark up items at least three times wholesale price, she said. Kiosk owners interviewed declined to describe their markups, but African immigrant Atchossa Tchama said he comfortably replaced the $40,000 income he earned working for the federal government within his first year of owning the kiosk and has since surpassed that.
Because of the relatively low start-up costs, mall kiosks "act as an incubation program," Norrins said. "It is harder for immigrants to get into a [permanent] store," Hannon said. At Tysons, an entrepreneur would pay $50,000 a year to rent a kiosk and $150,000 for a small store, according to Hannon.
Gungor, 43, eventually hopes to open a store, but for now he spends 12 hours six days a week at his cart, named Eastern Market. His wife, a journalist, continues to live in Turkey, where Gungor used to own a small coastal hotel and a construction company. He said he was able to get an investment visa because of his plans to start a business here.
Before leaving Turkey, he made connections with artisans in Istanbul, who now ship him handicrafts to sell. Last year, he also began acting as a wholesaler for Turkish manufacturers and artisans. He sells ceramic plates, carpets, pillowcases and other Turkish products to about two dozen small boutique owners. With the wholesale operation and kiosks, his monthly sales total about $17,000, Gungor said.