A Houston small business owner says his streetwear apparel store was pushed out of the city’s Galleria Mall because the property owner needed to make way for a major sneaker retailer. The mall offered him a smaller location to move his store, but told him he could not sell sneakers, 60 percent of his business, because it would compete with the new tenant.
Ken Haggerty, founder and CEO of Agenda Houston, opened his popular Black-owned clothing store in 2016, according to an interview on CW39’s Houston Happens. While Haggerty hocks designer clothes and accessories, the shop is known for the rare and exclusive sneaker offering.
About Agenda Houston
Agenda Houston not only gets the latest kicks from major brands like Nike, Adidas, New Balance, Yeezy’s, etc., but he also has a thriving resale component to the business, dealing hard-to-find retro sneakers.
Some of the sneakers Haggerty sells are pre-released by Brand Jordan and exclusive Louis Vuitton Air Force 1 cross brands with prices ranging from $250 to $3,000. These exclusives have attracted big name celebrities like Stunna 4 Vegas, Sauce Walka, and Don Toliver.
Now, after having a prime location in the mall for the past four years, he believes he is being targeted by Galleria Mall owner Simon Property Group, the nation’s largest mall owner, and their new tenant A Sneaker City.
Galleria Mall Drama
Like Agenda Houston, A Sneaker City is a premier Buy/Sell/Trade store for fashion sneakers and streetwear.
Unlike the local store, which was originally located on the second floor of the mall, next to Saks Fifth Ave, the new store can afford and was granted a long-term lease that also carried an exclusivity deal that prohibited a specific type of competitor from operating in a particular radius of their establishment.
Jenny Harris, the Houston regional vice president for Simon Property Group, explained the terms of a short-term lease vs. a long-term lease for the company.
“Our short term leasing program is used as an opportunity to get those people in the door,” Harris said in an interview with the Houston Chronicle. “We bring those tenants in almost like an incubator. We bring them in at a significantly reduced rent into our really great real estate.”
“We typically exercise this clause whenever we have a permanent tenant that’s secured for space,” she continued.
Adding, “Whenever we do have to exercise that clause we try our best to find an alternative space in the center for the displaced short term leasing tenant.”
Haggerty understands the business of it but feels he is being pushed out by big business.
“They never offered me an opportunity to submit a competitive offer, and to the best of my knowledge, they haven’t told anyone else in the mall they can’t sell shoes anymore, just me. It all feels very targeted and discriminatory,” he said.
“I always pay on time,” Haggerty said. “I always follow the rules; I keep the insurance. I never wanted to leave. The goal was to stay in The Galleria and get a permanent space.”
A spokesperson for The Galleria commented on Agenda Houston’s plight, sharing that he placed himself in this position when he renegotiated his leasing agreement.
“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,” the statement read. “We are operating under the terms of that mutually agreed to and signed contract and expect our 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.”
His real estate agent Tia Manteca says this is strategic.
“They’re pushing a particular demographic to a part of the mall,” Manteca explained. “Ken is an African-American business owner and they shut us down and didn’t give him the opportunity to present his case. The temp leasing contract basically diverted him to stay in the temp place, which is the norm for most minority business owners.”
He will be leaving his spot right before the retail push for the Christmas holiday season starts, the biggest selling period of the year.
About the Sneaker Reselling Business
The sneaker reselling business has become a profitable industry for those who decide to jump in the space. A Cowen & Co study titled “Sneakers as an Alternative Asset Class, Part II” released in July 2022 stated that in North America alone, the industry is worth $2 billion, connecting the accelerated growth to COVID-19.
“COVID-19 is accelerating digital transformation in both the primary and resale markets for sneakers and streetwear,” the report stated. “Our estimates of third-party data and interviews with channel participants suggest the sneaker and streetwear resale market is north of $2B in North America, growing by 20%+ y/y with potential to reach $30 billion globally by FY30E.”
Agenda Houston’s owner said he used to work for a big-box retailer when he was a teen, and this motivated him to want to sell shoes.
Haggerty said his company has been “taking it day by day,” and once realizing there was no way to stay in the Galleria Mall, has chosen to set up shop someplace else. Agenda Houston will now set up a new flagship store in Upper Kirby on Tuesday, Nov. 1, at 3300 Kirby Drive. The new place will feature a more extensive inventory, a large shoe wall, and VIP lounge for celebrity clients.
Ideally, Haggerty wants to expand his new shop. When asked what’s next, he said, “Just more stores.”