Local Houston business owner says Galleria is changing his brand, will lose up to 60% of his sales
HOUSTON - Ken Haggerty says he’s told often by officials at the Galleria that his Agenda store is one of the top-selling vendors in the mall – which made not being offered a better opportunity for growth frustrating for him.
Haggerty tells FOX 26 that managers at the Galleria are dramatically changing his brand and he feels singled out.
RELATED: Country singer Dale Watson's van, guitar stolen from Galleria parking lot
Agenda, an upscale urban street wear store, can only sell clothing in their shop, per a new leasing agreement with the mall.
"The leasing manager says it was out of his hands," says Haggerty. "This time, I’m thinking ok, I have to move again. That’s fine…but when you tell me I can't sell shoes anymore, what do you expect me to do? I want to stay for as long as possible."
A document obtained by FOX 26 shows the new two-year leasing agreement between Agenda and the Galleria, which states Agenda’s space can be used "for the non-exclusive retail sale of American and European urban street fashion, clothing ONLY, with related accessories. No shoe wear, sneakers, or related of any kind whatsoever."
Their high-end sneakers make up about 60% of annual sales. Haggerty says there are usually lines out of their door for certain release dates.
He also has not heard of any other vendor that sells shoes being offered this same type of alternative to continue as tenants.
"In 2018, I was recruited by the Galleria to come there for more diversity," says Haggerty. "I'm always on time with my rent. I turn my sales in like I'm supposed to. I don't have any problems."
Haggerty says he was told by the leasing manager this was due to a new, exclusivity deal between the Galleria and A Sneaker City – a national buy/sell/trade shoe vendor now open in the Galleria next to the Ice Skating Rink area.
Haggerty also has to move Agenda to a different location in the Galleria - with a third of the 6,000 square feet his current space has, and less foot traffic.
While relocation in the mall isn't unusual - his realtor says many urban street wear vendors are being pushed to the same area.
"In business, you always want an opportunity," says Tia Manteca, his realtor with Jerry Fullerton Realty. "He has done his due diligence, he's done the work, he has the success to earn that conversation."
In April, Haggerty offered to pay more than double the rent, $19,500 a month, just to keep the same operations. He tells FOX 26 that the Galleria did not budge on that initial offer.
Exclusivity deals are usually done with large brands according to Manteca. But in this case, it’s a burden for a top-selling local store, like Agenda, which she says is the epitome of an American success story.
FOLLOW THE LATEST HOUSTON NEWS
This all comes as Haggerty was preparing to scale his business with a second location on the 3300 block of Kirby Drive. Instead of focusing on sales in November, he’ll be moving two locations, with a lot of uncertainties.
"I was there during COVID when people were not paying rent, and we just kept on going, kept on paying," says Haggerty. "Getting customers to change what they’re used to doing is going to be hard."
FOX 26 reached out to The Galleria/Simon Property Group for a comment. While they chose not to comment on the talks of an exclusivity deal with A Sneaker City, they did release this statement:
"The tenant has been in the center for four years, and six months ago he negotiated and signed a new temporary lease agreement agreeing to relocate and in return received a significant reduction in rent. We are operating under the terms of that mutually agreed to and signed contract and expect the tenant to do so as well. Any insinuation that we acted in a discriminatory manner is baseless and totally unfounded. That is not how we operate, and we flatly reject the assertion."