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Street Smarts: Balancing Robertson’s Retail Mix

Lisa Kline opened her first namesake specialty store on Robertson Boulevard here in 1995, when the street was a sleepy extension of the city's interior design district.

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LOS ANGELES — Lisa Kline opened her first namesake specialty store on Robertson Boulevard here in 1995, when the street was a sleepy extension of the city’s interior design district.

That was long before Lindsay, Paris, Kirsten, Nicole and their pals helped turn the street into a fashion/celebrity happening.

“It was just a bunch of decorators’ stores and a couple of single-brand clothing boutiques,” Kline recalled. “It was only on instinct that I wanted to be there.”

Twelve years later, national retailers such as Coach and Intermix are spending hundreds of thousands of dollars to buy leases from the independent retailers that helped turn Robertson Boulevard into a famed shopping district and a playing field for ubiquitous paparazzi jostling to get the latest picture of a starlet shopping the two blocks between Beverly Boulevard and Third Street.

Retailers who pioneered Robertson Boulevard said the influx of national companies, including Chanel, Seven For All Mankind, Sunglass Hut, Reiss and Parasuco, along with Coach and Intermix, was transforming the strip from a haven for independent merchants into a conventional shopping destination more in line with Santa Monica’s Third Street Promenade.

“I don’t like what the street has become,” said Kline, who has two other boutiques on Robertson, Lisa Kline Men and Lisa Kline Kids. “It’s gotten really corporate. It’s not the same feeling.” However, she added, “I live for Robertson. I’m not going to let anyone run me out.”

Prices per square foot have soared from around $5 to $15 to $19 in the last three years, because of the big names eager to become a part of the celebrity fishbowl environment.

Real estate agent Jay Luchs, who brokered Intermix’s deal, said many of the quirky, small retailers that helped cultivate the street’s independent vibe might eventually be priced out.

“The stores…with old leases are most likely going to have to find other places to go when their leases come up,” he said.

Vacancies are rare, and most recent deals have been buyouts to landlords and existing tenants to vacate the space before lease terms are up, Luchs said. Should a space become available, typically there are several serious offers from major retailers.

“Any space under 1,500 square feet goes almost instantly,” said Luchs, who added that more landlords were signing with national names because the big names outbid small companies.

The departure of some small retailers is under way. When Los Angeles designer Chan Luu’s five-year lease on Robertson came up for renewal last September, her landlord tripled the rent to $15 a square foot, which made it impossible for her store to be profitable. “It was only 900 square feet of selling space,” Luu said. “How much could I sell in that small a space to make up for the rent?”

Accessories retailer Coach paid around $350,000 to take over the space, a payment that was split between Luu and her landlord, Luu said. “My landlord and I had a really good relationship and she wanted me to stay, but I just couldn’t,” she said. “The deal happened very quickly — within three or four days. I got what I wanted out of it.” Coach will launch its Robertson unit this fall.

Intermix, based in New York, an expanding specialty chain that carries high-end contemporary and designer merchandise, paid around $500,000 to take over a 5,000-square-foot unit from Los Angeles apparel brand Harari, Luchs said. The store is to open in August.

Real estate agent Chuck Dembo, who owns Dembo and Associates, said the up-front payment, or “key money,” paid by retailers to get onto the street is a by-product of hype.

“I think retailers are overpaying,” Dembo said. “There’s been an overabundance of excitement about [Robertson]. Sometimes people get caught up in that….Coach and Intermix could have fought a lot harder.”

Still, the new retailers here said Robertson’s high profile was worth the hefty tab.

“Robertson is cooler than other [shopping districts] in the city,” said Khajak Keledjian, co-owner of Intermix. “It’s not as stark as Melrose Avenue. It has good foot traffic and visibility.”

Intermix carries more than 300 contemporary and designer brands, many of which are already on Robertson, in stores such as Lisa Kline, Diavolina and Madison. “I think that everybody is tripping out about Intermix,” said Nevena Borissova, owner of Curve, one of the district’s pioneering boutiques. “I know other retailers on the street are unhappy.”

Kline, whose success helped create the situation, is clearly in the disgruntled category.

“Intermix has all the same stuff that we all have, and it makes it more difficult for us,” Kline said. “We all have a plan of what we’re going to do when they open, but I won’t know until they get in there if it will [impact sales].” Kline added that the specialty stores on the street had tried not to carry the same merchandise out of respect for one another. “Now, I have to worry about what [Intermix is] doing,” she said, “and I don’t want to worry about what they’re doing.”

Keledjian thinks there is room for everyone. “I respect what Kitson and the other stores do,” he said, “but it has nothing to do with what we do. We have no commonalities aside from all having cash registers. We have also been in coexistence with other [similar] retailers in other markets, and there is room for everyone. Good competition is good for the block. Our intention is not to kill that local business. We’ve never done that and that’s not our strategy.”

Canadian denim brand Parasuco launched a 3,000-square-foot store on Robertson this month after trying unsuccessfully to become a Kitson vendor. “I said, ‘You’re going to force me to open a store next to you,'” said company founder Sal Parasuco. And that’s what he did, taking over the lease of a bedding store adjacent to Kitson.

“Robertson is one of the few streets where you see pedestrians in L.A.,” said Parasuco, who also cited the centrally located parking garage as another plus. “We almost took a space on Melrose Place, but there’s no parking. When there’s parking available, people take the time to discover who you are.”

Parasuco declined to disclose the terms of the lease, but said, “I made an offer the landlord couldn’t refuse. Once [other companies] found out about us, everybody was trying to outbid and overbid us.”

“Robertson has this lovely cool feel about it,” said David Reiss, owner of British contemporary brand Reiss, which this week is opening its first West Coast store on Robertson, in a 12,000-square-foot space formerly occupied by Reebok. “I looked at all the major streets — Melrose [Avenue], off Rodeo Drive — but I wanted to be on the coolest street. Robertson by far had more to offer than other streets. Melrose Avenue was too fragmented, too long.”

Reiss said it took around a year to close the deal because of competing offers.

Sunglass Hut will open a 1,250-square-foot store on Robertson this year. “Robertson is really the right place for today’s hot brands,” said Jack Krause, general manager of the company, which is owned by the Luxottica Group. “Street locations are always a great opportunity for the brand.”

The arrival of mall-based retailers such as Sunglass Hut was a prime reason retailer Wendy Vaughn relocated her contemporary specialty store Bird to up-and-coming designer district Melrose Place in March 2006, after four years on Robertson Boulevard. “We saw the street turn into a very T-shirt, denim-driven” destination, Vaughn said. “It definitely had a more independent, boutique feel when we opened there….It also became very touristy, and that’s because of Kitson. The whole paparazzi thing created by Kitson ruined it for a lot of celebrity customers we had.”

Contemporary specialty store Kitson has become synonymous with Robertson Boulevard and celebrity shopping because of owner Fraser Ross’ marketing strategies. The company has grown from one to four units in seven years, encompassing 14,000 square feet of real estate on the street.

“People say I brought too much attention to Robertson,” Ross said. “But isn’t that what you do? You bring attention to your store.”

Not everyone is unhappy with Ross’ celebrity outreach. National retailers point to the street’s proximity to celebrities and stylists as a reason for setting up there. “There are a lot of taste makers and fashion influencers that live in L.A.,” said Intermix’s Keledjian. “Celebrities and stylists shop the street, and with the Ivy [restaurant] right across from us, we couldn’t have chosen a better location.”

“It’s an important street,” said Parasuco. “I’ve run into a lot of stylists that shop the street for clients.”

Stacey Bendet, owner of contemporary brand Alice + Olivia, which launched a 1,300-square-foot store on Robertson last year, said, “From a celebrity and buzz and brand perspective, it’s a great place to be.”

However, Kline said the aggressive photographers had driven away the A-list celebrities. “The celebrities who come now are the ones that want to be photographed,” she said.

Kline launched a 2,500-square-foot women’s store on Beverly Boulevard in a quiet section of Beverly Hills last year to offer customers a lower-profile alternative. “Now my clients can drive 10 minutes away and shop in a store that was how Lisa Kline was 13 years ago,” she said.

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