By  on July 18, 2007

LOS ANGELES — The space crunch for new stores in established shopping districts here is pushing new national and independent retailers to find the next cutting-edge retail neighborhood — and two appear to be emerging.

Seeking to replicate, or even improve on, the ambience of destination venues such as Robertson Boulevard and Melrose Place, many retailers are focusing on La Brea Avenue, between First and Fourth Streets, and Melrose Avenue, west of Orlando Avenue, where Melrose Place begins.

Vacancies on Los Angeles' high-profile shopping streets have dwindled to almost zero, and rents have doubled — and even tripled — in the last five years, topping out around $18 a square foot, real estate agents said. Factors contributing to the squeeze include Los Angeles' transition into a global fashion hub energized by the celebrity culture and a growing pool of local designers.

"People are searching high and low for something that has character and low rent, and that's hard to find," said Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corp. "When you walk down Robertson, you think, 'This is a pleasant place to be.' There aren't too many places in the city like that left."

Districts that begin as havens for independent boutiques — on Robertson Boulevard, Chanel, Coach, Intermix and others supplanted many smaller businesses — are almost always eventually co-opted by major companies. "The nationals move in and squeeze out the retailers who made the area what it was," Kyser said.

On Robertson Boulevard, those retailers included contemporary brand Chan Luu and upscale misses' label Harari, which recently accepted lease buyouts from Coach and Intermix, respectively, and have yet to relocate.

In the hunt for districts that combine hip neighbors, attractive retail space and affordable rents, easy access and ample parking, businesses with differing pedigrees — independent versus established — are zeroing in on sections of La Brea and Melrose Avenues.

The two areas, which are roughly a mile from each other, were far from commercially dormant before — both had restaurants and interior design stores for years — but in the last six months, they have seen an influx of high-end fashion retailers.The three blocks of La Brea Avenue attracting new apparel boutiques make up a fraction of the street, which begins in Hollywood and ends in Inglewood. Retailers such as Von Dutch, specialty boutique Sugar and vintage depot Jet Rag have operated stores in the Hollywood section of La Brea Avenue for years, but the new retail strip begins five blocks south, embedded in the affluent Hancock Park neighborhood of Los Angeles.

Since March, three new contemporary and designer specialty boutiques — Publik Park, Studio R.C. and Presse — have joined upscale specialty stores American Rag Cie, Iconology and designer vintage boutique The Way We Wore. American Rag, the area's pioneering boutique, doubled its selling space last year with the addition of its jeans-focused World Denim Bar.

"That whole corridor is changing," said Nicole Deflorian, a retail real estate agent with The Piken Co. who has recently leased spaces on La Brea. "The street has always had a furniture vibe, but now it's becoming more fashion. People are being priced out of other areas. We definitely are having more fashion retailers contact us, and we're reaching out to people in the fashion world now."

The current hodgepodge of businesses, including European-style restaurants such as Campanile and Ca' Brea and new gourmet food store Algabar, evoke the eclectic mix on Robertson Boulevard circa 1997.

Rents on the strip are also in the same $4-a-square-foot range as they were on Robertson 10 years ago, Deflorian said. Parking at metered street spots and in spots behind storefronts is generally no-fuss.

Retailer Michelle Dalton Tyree, a former WWD market editor who launched contemporary specialty store Iconology in February 2006 on La Brea Avenue between Third and Fourth Streets (when the only other notable business was a car dealership), always believed other stores would follow. "The Hancock Park clientele alone is huge, and they've been very excited about having high-end options closer to home,'' she said.

Dalton Tyree added that the street "is eclectic in the best sense of the word — boutiques, home stores, fabulous restaurants." Iconology's clientele includes Eva Longoria-Parker and Felicity Huffman, who are able to shop the street without being trailed by paparazzi. Unlike Robertson, which has more of a walking, village-like feel, La Brea is one of the city's main thoroughfares, with a steady flow of cars speeding past, so foot traffic continues to be sparse.Ex-New Yorker Lily Savitch opened her 1,200-square-foot namesake contemporary specialty store on La Brea Avenue in March, several blocks north of where the other fashion retailers have set up. "I really believe in this street and this neighborhood,'' she said. "I wanted something that had a NoLIta or an East Village feel....All the stores that are here are very different from one another. It's not like Robertson, where the boutiques carry all the same things."

Chanel Lee, another retailer new to the street, launched specialty store Studio R.C., which sells high-end Asian labels including Suecomma Bonnie and H.R., in June next to high-end designer store Presse. "I would drive down the street every day for years and see how it was developing,'' she said. "I had no hesitation in opening here."

As La Brea lures first-time retailers like Savitch and Lee, the west end of Melrose Avenue is enticing major names in fashion. The street is already famous for its shopping, but apparel companies typically have kept to the densely packed, well-traveled blocks east of Orlando Avenue.

Newfound interest among luxury apparel companies in the 13-block western section of Melrose could be credited to the rise of the adjacent designer shopping row, Melrose Place. That strip of Melrose Avenue "has really just become something," said Jay Luchs, a retail realtor for CB Richard Ellis. "Suddenly, there are [big-name] people wanting to be there."

Theory and Diabless have recently joined the pioneering Marc by Marc Jacobs store and Diane von Furstenberg on the two blocks of Melrose Avenue just west of Orlando Avenue. A BCBG flagship and a Helmut Lang boutique are slated to launch on the strip in August, near an APC store that opened last month.

"Melrose Avenue is a key up-and-coming retail location," said Lubov Azria, creative director of the BCBG Max Azria Group. "As an L.A.-based company, we feel it is necessary to have visibility in the hottest retail area in L.A."

Parking in the district can be tough, and is relegated to metered street spots. This prompted Theory and Helmut Lang, both owned by Link Theory Holdings Co. Ltd., to create a shared parking lot behind the two units. Azria said she was unconcerned with the dearth of parking.West of La Cienega Boulevard, Melrose Avenue shrinks from a fast-moving thruway to a quaint, slow-moving local street, snaking through the city's interior design district. The slower pace, paired with landscaped sidewalks and the presence of two popular eateries, Le Pain Quotidien and Urth Caffe, have equaled a steady-but-concentrated flow of foot traffic in the center of the district.

Kitson, the retailer that helped build buzz about Robertson Boulevard, plans to open a 7,000-square-foot store on Melrose Avenue, across from the Pacific Design Center, in October. "I always try to go where there are popular restaurants because there's foot traffic there," said Kitson owner Fraser Ross. "The real reason I'm going to Melrose is to create a new [shopping] area....It's going to have a different vibe from Robertson, though — more upscale."

Longtime tenants on these western blocks include John Varvatos and artsy designer emporium Maxfield. Among the newer additions are Seaton, DDC Lab, vintage store Sielian's, specialty boutique Sienna and Costume National, which relocated from the more bustling eastern section of Melrose Avenue (now more of a sportswear hub) last year.

Along with Kitson, existing tenants soon will be rubbing elbows with two of fashion's most illustrious names, Balenciaga and Karl Lagerfeld. Both fashion houses have signed leases on the street and are expected to launch units later this year.

Luchs noted that the Tommy Hilfiger Corp., Karl Lagerfeld's parent company, originally looked into the space on Melrose Avenue for Ally Hilfiger's forthcoming People's Place specialty store, but "Tommy Hilfiger corporate saw it and they wanted it for Karl Lagerfeld," Luchs said.

Contemporary brand Seaton opened a store next to Costume National on one of the street's most western blocks. Foot traffic on the block is still sparse, said Seaton co-owner Mark Freeman, "but since we've been there, I can't tell you how many people are calling me and asking if there's any space opening."

He added, "I personally hope it doesn't become like Robertson. There's something sleepy and charming about the way it is now."

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