Tales of the bazaar

Running an electronics shop on Stockton Boulevard, Saria Cham got sick of all the stickups and panhandling. So she moved a few blocks down, to a building with three to four security guards, including one who escorted her to her car on a late night.

For $1,800 a month, Cham gets 500 square feet for her shop, TVs for Less. That comes with security, utilities and marketing, all through a collective agreement at ShopSmart.

The outlet opened in July and now houses 120 vendor booths inside a former Sam’s Club. The tenants pay rent to John Worden and Matt Mertens, who bought the 108,000 square feet with the idea of pooling inexpensive businesses under one roof.

Think of it as an experimental reimagining of the bargain-basement bazaar. ShopSmart, at 7660 Stockton Boulevard near Mack Road, has the concrete-floor warehouse look of a Cal Expo trade show, mixed with the deep discounts and low overhead of a Denio’s Farmers Market & Swap Meet, as well as the continuity and new merchandise of a mall.

In between bites of sandwiches and burritos, merchants hawk stiletto boots, argyle sweaters, pomegranates, computer repair and car insurance. Mertens and Worden installed arcade games and three jump houses by way of inviting families. But the target demographics are most obvious in the merchandise: bottles of sriracha (the Thai hot sauce with the rooster on the label); African braids; shirts that read “I just look illegal.”

For the “middle to low-end marketplace,” Worden said, he and his partner have run ads in Hmong, Korean, Spanish and Vietnamese. They are embedding themselves in local cultural festivities, from hosting a Mexican Posada near Christmas to joining the Vietnamese new year, Tet. Some vendors speak multiple languages, as reflected in signs dotting the lettered rows of white walls that partition the lots.

“The ethnic community embraces this concept more than the traditional Anglo community,” Worden said.

He is banking success on that combination of the ethnic niche and the recovering economy’s value-conscious shopper. Having grown up together in Los Angeles, he and Mertens chose south Sacramento—admittedly “not the best part of Sacramento”—because its high density correlates with higher spending than even Roseville.

And so far, their plan is kind of working. Despite losing 20 vendors since inception, ShopSmart has turned a small profit in its competition against big-name discounters like Walmart and Ross. It has seen many tenants double and triple their leases, which are renewed monthly.

Eddie Cervantes, for instance, opened his first tattoo joint on a 250-square-foot parcel at ShopSmart in August. But the bumping elbows soon told him he needed twice as much space, maybe more later, for Lucky Rabbit Tattoos. He attributes the growth to the motley traffic that walks by, bringing the kind of clients he otherwise might never meet.

“My dream was to tattoo as an artist and stay busy, but I guess it got too busy,” he said, while inking the word “family” on a patron’s arm.

The proprietors were seeking out neophytes like Cervantes, as well as businesspeople with years of experience. They contribute to an approach deemed “unique” by a county planner.

“We viewed [ShopSmart] as an opportunity for small-business owners to have an entry, a storefront with limited investment,” said Troy Givans, who consults with entrepreneurs for Sacramento County’s Economic Development Department.

As for vendors who’ve left, Mertens and Worden reframe the turnover as a treat for customers, who always have a new business to visit.

But the indoor-flea-market owners are still inching along, toward a goal of hitting capacity—roughly 165 vendors—so they can start a waiting list and up the rent.

The duo, who come from TV advertising backgrounds, are tight-lipped about money matters, though. They won’t divulge figures for profit, or for the cushy lease they got on the building. But if rent is any indication, the square footage would be in the ballpark of $400,000.

With their flexible contracts, many tenants seem to be taking a wait-and-see tactic. Like their landlords, the leasers are wondering whether the ShopSmart model will catch on.

Said Cham, “Everybody here is just, like, hopefully it’s going to be known.”