Retailers are always looking for new ways to improve their bottom line, and one way they're doing that is through pop up shops. These short-term retail spaces have become popular with every type of retailer, from large chains to one-person operations.

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What's more, these stores can be found everywhere - from the high street of big cities to small towns across the country. But are they profitable? According to figures released by Shop Direct Group Limited, which includes brands such as Littlewoods, Very, and Findel, pop-up shops definitely have a place in modern retailing.

Overall, this year Shop Direct Group saw its profits jump 19% for the first half of 2008/09, though it did lose £25million on Internet investments. The group made £80.5million for the first half of 2008/09, showing that its Internet investments haven't paid off as it would've liked.

And according to the figures, Shop Direct Group could be expanding even further in the near future; adding 200 staff members and opening another 550 shops under its brands.

More than just a 'blip'

However, it seems that one key area is missing from this report - pop-up shops aren't mentioned at all! It appears that they're not included in Shop Direct Group's figures, but are they profitable enough to mention? If so, why don't they include them?

Shop Direct Group has also stated many times before how much it likes pop-up shops - after all, it uses the 'pop up store' option when it opens its Very.co.uk shops each season!

So are pop-up shops profitable? According to Shop Direct Group, their operating profits have jumped 19%. This is an impressive amount in itself, but what about pop-up stores - are they making money too? If so, why aren't they included in Shop Direct Group's overall figures or mentioned anywhere in the report? Does this suggest that they're not as profitable as the group would like them to be?

It seems likely that if these short-term retail spaces were bringing in profits on a par with regular stores then Shop Direct Group would mention them somewhere in its report. And likewise, if they weren't turning a profit, then Shop Direct Group would also mention the lack of profitability too.

So what does this report say about pop-up shops? According to Shop Direct Group, pop-up stores aren't as profitable as originally thought. Perhaps instead of replacing regular shops with these 'pop ups', retailers should be taking a better look at their current retail strategies and locations before making any rash decisions regarding their business.

And that's why we think that pop-up shops are not as profitable as retailers believe them to be. Is this opinion correct - or is it just another myth in the world of retailing? Let us know your thoughts on our Facebook page.

Are Pop-Up Shops Worth It?

Pop-up shops "are hot" these days, spurred along with the help of larger retailers. Seattle's Nordstrom Rack in May opened a store at Bellevue Square where it tested products not currently carried in Nordstrom stores. The pop-up shop in a smaller space was also a chance to try out new business models and learn from customers before investing in a permanent location.

The Bend Bulletin reported in April on how small businesses are benefitting from pop-up retailing through increased visibility and increased sales. In downtown Bend, Ore., for instance, more than 20 pop-ups over the past year have helped fill empty storefronts and give entrepreneurs the opportunity to test locations without committing to long-term leases.

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"More retailers are looking at ways to take advantage of this trend," reports the Wall Street Journal . Though pop-ups have been around for years, they've become more popular since the recession.

Larger stores are taking notice, however. Target has its own temporary store in New York City's Times Square through the end of 2014. While smaller "micro boutiques" can make a profit with sales reaching $450 per square foot, larger companies like Nordstrom Rack need sales to top $1,500 per square foot to break even on their temporary locations. Because Nordstrom Rack is not planning on staying permanently in Bellevue Square, it will also need to compensate other landlords for lost business when it moves after six months.

Nordstrom declined to discuss the costs of opening a pop-up, but some estimates put it as high as $1 million. Because of this, Nordstrom Rack is only looking at temporary locations that can be closed down quickly. There are other issues besides cost, such as finding a location and negotiating with landlords.