Retailers and manufacturers in California are being relentlessly battered by a combination of economic forces, with more hardships forecast.
The recent liquidation of Mervyns and bankruptcy filing of Gottschalks Inc. — California-based chains — were benchmarks in a recession that has left stores throughout the state with fewer customers.
Clothing manufacturers are reeling from the retail weakness, resulting in some shutting down, while others take measures to cut staff, costs and inventory to survive. In addition, apparel businesses are bracing for negative fallout from an imminent 1 percent boost in the state sales tax, which was included in the legislative package that closed the state government’s record $42 billion budget shortfall.
“Most of us have just written off 2009 completely and are trying to focus on the better times ahead, what we hope will be 2010,” said Fred Levine, owner of the M. Fredric chain of contemporary boutiques based in Agoura Hills, Calif.
The Los Angeles County Economic Development Corp. projects an estimated 6 percent drop in retail sales for the state’s largest county this year, compared with a 1.1 percent decline in 2008. Measured by the number of residents, the average retail sales per capita in the city of Los Angeles equals $7,634 — versus $51,171 in Beverly Hills and $25,446 in West Hollywood.
As home foreclosures soar, Southern California’s median home price dropped 39 percent to $250,000 in February from a year ago, and the median price in the Bay Area fell 46 percent to $300,000 in January, according to MDA DataQuick, a San Diego-based firm that tracks the real estate market.
Economists and analysts said the broadness of this downturn works against a quick turnaround. Previous recessions were caused by the collapse of a single sector in the state — the dot-com bust earlier this decade and the aerospace industry’s decline in the Nineties. This time California, which has the biggest economy and population of any state, will rely on outside forces to spark a revival because of the overall erosion of its financial condition.
“We have three big sectors in our economy, which are really tied to the world,” said Stephen Levy, director and senior economist at the Center for Continuing Study of the California Economy in Palo Alto, Calif. “We are tied in with tourism…the world venture capital market and with foreign trade.”
The number of tourists visiting California in 2008 will fall an estimated 2 percent from 355 million in 2007. The amount of money that tourists spent is anticipated to be flat at $96.7 billion in 2008.
The upheaval hasn’t spared Hollywood, although box office ticket sales continue to grow — up more than 17 percent to date from a year ago, according to Media by Numbers — and California has approved a $500 million production tax credit incentive program. But at least 20 of 39 new television pilots are scheduled to shoot outside of the Golden State, trade newspaper Variety reported. Film production has been hampered by cost-cutting, financing challenges and protracted contract negotiations with the Screen Actors Guild, among other factors. Variety said there are 118 wide release films set to open in 2009, a 16 percent decline from 140 last year. That means fewer jobs in California.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast