#5- Do Pop-Up Stores Really Make a Lot of Money?

Introduction

My company office is located right next to Seongsu Station, so I've been watching Seongsu's transformation up close every day for about two years. Even during COVID, Seongsu was one of the few places where you could still see crowds on weekends, with construction going up on every block. One of the things that makes this dynamic neighborhood special is how many pop-up stores it has. Just as you can easily find blog posts like "First Week of July: Seongsu Pop-Up Stores Round-Up" online, new pop-up stores appear and disappear every single day. When I walk outside for lunch, I routinely catch myself saying "this place changed already" or "this one is already gone."

Over the past two years, I've been surrounded by famous pop-up stores like Dior, Peaches, and Scène — places people specifically plan a trip to visit — and until now I was content with just enjoying the spectacle. But lately, seeing a lot of pop-up store rental listings in real estate windows, I became curious about their profitability. That led me to learn more about Scène, the space closest to me.

Why Pop-Up Stores?

These days, marketing that imprints a brand on consumers through "experience" is especially active. Go into a pop-up store and you'll find it's not just a display or exhibition — it actively drives user participation through photo booths, hand-washing experiences, augmented reality, and the like. From a business perspective, I also think this is a strategy to earn a "hip" image, activating emotion rather than reason, and creating a higher unit price relative to utility — boosting profitability.

Why Seongsu?

Until the mid-2010s, stepping off the main road into Seongsu's side streets reportedly felt dark and even unsettling. The history of Seongsu becoming "cool" traces back to Daelim Warehouse, a logistics warehouse converted in 2011, followed by Zagmachi, a print shop remodeled in 2014, and Onion, a bathhouse converted in 2016. Then from 2020, with rents cheaper than Gangnam and a bridge connecting directly to Apgujeong, companies started relocating their headquarters here. As companies moved in, working professionals with spending power flowed into Seongsu — transforming the weekend-only commercial district into a seven-day one, and the Seongsu golden age began. Famous brand pop-ups drew visitors who then wandered into unknown emerging brand shops nearby — a trickle-down effect that brought more and more brands together, cementing Seongsu's status as the holy ground of pop-up stores.

🍿 Brand Pop-Up Business

After our office first moved to Seongsu, I spent months puzzling over a white structure right in front of the building. It turned out to be Scène — operating a café on the 1st floor and a concept select shop on the 2nd floor. Through an analysis of Scène, I'll take a closer look at the hot pop-up business in Seongsu.

Company Overview

• Company name: Scène Co., Ltd.
• Founded: June 14, 2019
• Employee count: 15–20
• History:
  • After a soft launch in December 2019, Scène started becoming well-known on Instagram and blogs as a hip Seongsu café.
  • In the early days, the 1st floor café operated under the coffee brand "Arco" (at some point Arco disappeared and was replaced by the Scène café, suggesting an early collaboration that ended).
  • First pop-up event held in September 2020.
  • As of 2023, the brand pop-up business appears to be the main focus (it first built word-of-mouth as a café, then likely transitioned naturally to pop-ups due to COVID's impact).

Scène Co., Ltd. revenue and operating profit

Property Overview

• Address: 20, Yeonmujang 5-gil, Seongdong-gu, Seoul
• Area: Lot ~200 pyeong, building gross floor area ~156 pyeong (1st floor 89 pyeong, 2nd floor 67 pyeong)
• The outdoor lot isn't just used as a parking lot — tables and chairs have been added, showing an effort to maximize space revenue.
• (Notably) A valet parking booth has been set up for a "hip" parking experience.
• The building was originally a factory built in 1968.
• Registry findings:
  • Ownership transferred in 1975.
  • Donated in 2014 and 2015 to what appear to be grandchildren.
  • One of the gift recipients is a scholarship foundation. Researching further, the original owner — a woman — started a clothing wholesale and fabric business after the Korean War, eventually expanding into leather apparel trade. As the leather industry declined, she appears to have pivoted to real estate construction and leasing.
  • In 2014, an annex building was demolished (suggesting a need for a new type of leasing business beyond a factory from this point).
  • (Just looking at the registry once yielded information I never expected — I was surprised.)

🎬 Scène's Pop-Up Business

Even for someone like me with limited interest in this space, in the June–August period Scène hosted notable brand pop-ups including Le Sserafim, Hana Bank, Hoegaarden, and Coupang. Visiting the official website, in July all but 5 days (set aside for event setup) were fully booked with pop-up events — roughly 25 days of programming in a single month. Looking at the formats used:

Types by space usage

1. Full rental of both 1st and 2nd floors
2. 2nd floor only rented as pop-up space; 1st floor remains the Scène café
3. Brand promotional materials displayed on the exterior/interior while the 1st floor café and 2nd floor select shop continue as normal

• In all formats, the brand hosting the pop-up collaborates with the Scène café to develop and sell limited-edition menu items during the pop-up period.
• From this structure, I'd infer that Scène is not simply renting out space but is also involved in space planning and event planning.

1. Brand pop-up: Regardless of product/service type, focused on brand awareness — the most flexible format
2. Pop-up store: Fashion, cosmetics, bedding, etc. — product-focused promotion with sales
3. Exhibition: Displaying digital art or artwork in a gallery-like format

🎬 Scène's Revenue Structure

Here's my breakdown of Scène's revenue and cost structure. Writing out each line item, I was surprised to find that despite Seongsu's high rents, the profit margin of the space rental business is quite high. To achieve this level of profitability, a few structural elements are essential:

• An attractive location and large space that justifies high rental rates from brands with deep pockets
• An established popularity of the existing business that drives inbound brand inquiries directly — rather than relying on trickle-down or brokers (= Scène's early café popularity)
• A core cash-generating business that can use the real estate even when there's no pop-up booking (= the café)
  • Personally, I think this is the distinctive element that sets Scène apart from other venue rental operators.

Revenue Assumptions

• Venue rental: 70 pyeong × ₩50,000 × 20 days × 12 months = ₩840M/year
  • The primary format: 2nd floor rented for pop-up events while the 1st floor runs the Scène café with limited pop-up menu. So I only counted the 2nd floor (70 pyeong) as the fee-generating rental space.
  • Exact rates were hard to determine; using benchmark data from nearby popular venue rental quotes, I estimated ₩50,000 per pyeong per day for short-term rentals.
  • Based on July's schedule, I assumed 20 pop-up days per month.
• Café revenue: 50 seats × 3 turns × ₩10,000 × 30 days × 12 months = ₩540M/year
  • ~50 indoor seats (including outdoor seats, 100+; it was once known as a large café accommodating 100+ people).
  • 3 turns per day — generous but justified by pop-up foot traffic. Unit price ₩10,000 (₩5,000 Americano + ₩5,000 bakery).
• Coffee bean sales: Below ₩50M/year — negligible
• Self-branded merchandise: Below ₩50M/year — negligible

Cost Assumptions

• Rent: ₩19.81M/month × 12 months = ₩238M/year
  • Seongsu average rent rose from ₩100,000/pyeong (2018) to ₩150,000/pyeong (2022).
  • Assuming Scène signed in 2020 at ₩110,000/pyeong with 5% annual cap increases → ~₩127,000/pyeong by 2023. Total 156 pyeong.
• Café COGS: ₩162M/year (30% COGS ratio, conservatively)
• Labor + overhead: 17.5 employees × ₩33M × 1.3 = ₩750M/year

Tallying these up, the revenue scale and profit scale roughly align with publicly disclosed figures. Additional variables worth noting: on the revenue side, consulting revenue for pop-up space planning may exist; on the cost side, marketing costs and initial interior/fit-out investment are not negligible.

Closing

Looking closely at what's happening in a place I used to walk by without a second thought gave me genuinely interesting stories and a lot to learn. In preparing this post, I came to understand that while venue rental businesses face physical constraints like location and rent, if you can grow the value of the space, those constraints become a moat — a great business that can sustain high margins over a long period. I gained a new perspective: it's not just products and services that have brands — spaces have brands too.

In retrospect, I've come to believe this business makes good money — but I also wonder: could I have imagined, looking at the skeletal shell of that old factory in 2019, turning it into this multi-purpose cultural space? Would anyone thinking through "café or restaurant or retail shop?" with a calculator alone have arrived at this business? In that sense, this reminds me once again — in a familiar way — of the lesson that entrepreneurs must be visionaries who see what others can't, and must have the tenacity to execute and turn it into results.