Back

Switchyards, East Hills

Start Smaller, Scale Smarter, Go Faster

The default ambition of 20th-century retail was the bigger box: more square feet, more SKUs, more seats. The default ambition of 2036 is the smaller box, replicated faster: lower buildout, faster payback, denser networks, and formats that fit inside neighborhoods instead of beside highways.

The logic is arithmetic. Buildout costs and rents have risen faster than revenue per square foot for most concepts (see Wave 9). Shrinking the box attacks the two biggest fixed costs at once, drops the breakeven, and — crucially — multiplies the number of viable sites. A concept that needs 4,500 square feet

Who's living it today. Atlanta-born Switchyards may be the purest expression of the thesis. Its 24/7 "neighborhood work clubs" occupy modest second-generation spaces — century-old churches, former auto shops — cap membership at roughly 250 per club at a $100/month price point, and grant every member access to every club.1,2 The
model is deliberately small, deliberately neighborhood-first (average commute: about ten minutes), and deliberately replicable: after raising just $5 million, the company laid out plans for 200 clubs by 2029, and demand has been so strong that recent membership drops in cities like Austin, Kansas City, and Charleston sold out within minutes — Austin's flagship in a record 2 minutes 43 seconds.1,3 Founder Michael Tavani's bet is that in ten years, "my neighborhood work club" will be as normal a phrase as "my gym."1 They have since gone on to raise additional venture capital to fuel growth.

Michael Tavani, CEO & founder of Switchyards

In beauty, Swella Braid Bar — a luxury braid bar built on online booking and BraidPass, the first annual braid membership of its kind — didn't wait for flagship-sized sites to keep growing. For its third location, it designed Swella Lite: a pared-down format that keeps the brand, booking engine, and membership but strips the box to essentials.

In food, Glide Pizza started in 2020 as a walk-up slice window at Irwin Street Market on the Eastside BeltLine, then added a takeout window in Old Fourth Ward — proving demand with almost no buildout before ever committing to a dining room. When it did, it took over a secondhand restaurant space in Decatur.

Our takeaway to operators today: think twice before committing to a high-cost buildout, especially early in your business’s journey. 


The giants are validating the trend from above. IKEA — famous for 300,000-square-foot blue boxes — is opening ten U.S. stores in 2026, many small-format, explicitly because smaller footprints let it enter markets (Huntsville, Alabama; infill Chicago; city-center Los Angeles) it could never justify with a big box.4 Target has run small formats since 2016; Macy's is betting on small-format Bloomie's; Nordstrom, Whole Foods, and Sprouts have all shrunk footprints to get closer to customers.5,6

The 2036 picture. "Scale" stops meaning square footage and starts meaning node count. Winning emerging brands design their unit economics around 800–2,000 square feet, sub-$500K buildouts (when possible), and 12–24 month paybacks, then compound like software: many small bets, with network effects across locations (one membership, every club).

Brooke Hills (left), Zanbria Asante (right) Co-founders of Swella

THE TAKEAWAY

Small-format discipline is a financing superpower. Smaller checks per unit mean more units per dollar of capital, more shots on goal, and faster proof of portability — the single most important question for any brand under 100 locations. When capital is expensive, the smallest viable box wins.

Sources

Atlanta Journal-Constitution, "Switchyards to expand co-working clubs in Atlanta, Nashville, Charlotte and other cities" (2024)— https://www.ajc.com/news/business/switchyards-to-expand-co-working-clubs-in-atlanta-nashville-charlotte-and-other-cities/DDCXZWN5FZAF5EBIHPR6PT6EOQ/


  1. Hypepotamus, "Switchyards and its 'work club' concept moves into Music City" — https://www.hypepotamus.com/switchyards-and-its-work-club-concept-moves-into-music-city/


  2. ATXtoday, "Switchyards to open second 'neighborhood work club' in east Austin" (2026) — https://atxtoday.6amcity.com/business/switchyards-second-work-club-east-austin

  3. Modern Retail, "How IKEA got closer to its shoppers with new small-format stores" (Feb 2026) — https://www.modernretail.co/operations/how-ikea-got-closer-to-its-shoppers-with-new-small-format-stores-best-buy-partnership/


  4. CNBC, "For big-box retail, one of the longest-running experiments is shrinking" (2024) — https://www.cnbc.com/2024/11/30/for-big-box-retail-one-of-longest-running-experiments-is-shrinking.html


  5. RLC Global Forum, "Are Small-Format Department Stores the New Normal?" (2025) — https://rlcglobalforum.com/retail-insights/small-format-department-stores-the-new-normal

Co-Tenancy as a Core Design Principle

Next Trend