Is it okay to write:
"Shop Name", read a sign hanging above the shop.
Should I use italics for the shop name or use any other type of formatting? I wasn't sure how to do this.
This is for fiction.
In nonfiction, refer to the style guide of the institution, school, or publisher.
In fiction, pick whatever you like and be consistent about it.
There's been a tendency lately to drop all punctuation (I personally dislike this) which probably originated from Cormac Mccarthy. I'd pick simple quotation marks around the store name, but as I said, it's a matter of personal preference and consistency
There is no 'correct' format. And even if there was it would be governed by POV. Understanding POV is essential before even posing the question.
"Somewhere in a shit-hole town in a shit-hole country stands The Best Exotic Trump Hotel."
Hillary read the golden sign above the door, The Best Exotic Trump Hotel "Bill, I'm not staying here. I'd rather pitch a tent in the woods," she said.
Or it works the other way around . . .
Hillary read the golden sign above the door, "The Best Exotic Trump Hotel". She returned to the car. I'm not staying here. I rather pitch a tent in the woods.
The question is who saw the sign? Is it 3rd person narrator or an active character.
To add to what Surtsey said, it's also a good thing to make this as organic as possible. For example:
The flashing neon warned him, but the light still assaulted Bob as he rounded the corner. "Trump Tower" blinked in shimmering golden hues, casting a pallor on all those below.
The creaking caught Bob's attention. The sign rocked back and forth in the cold winter air outside the tavern. "Ye Olde Trump Tower," he mouthed silently, breath clouding before him.
The point being that you're avoiding a mere infodump; the sign is part of the atmosphere and setting that you're immersing your reader in.
Most of the time, when I write in the name of a store or a shop, I either use italics or quotation marks. Here's a quick example:
As Angela made her way down the street, a "Beverly's Boutique" sign caught her eye.
As Angela made her way down the street, a Beverly's Boutique sign caught her eye.
Either method will work, as long as you find a way to clearly offset the text from the rest, marking it as something read by the character in your story, or by the person in your account. In my own writing, I've just used quotation marks to show what's on the sign.
If you take it to an editor later, they can let you know if it doesn't work. I believe for fiction writing, though, that either italics or quotation marks are acceptable for signs and written script as read by people within the story.