THE BEACH CROWD
THE OUTLOOK IS SUNNY FOR RETAIL AS SANTA MONICA’S APPEAL GOES DEEPER THAN THE SAND AND SURF.
Byline: Deirdre Mendoza
SANTA MONICA — The sun shines an average of 330 days a year in this laid-back coastal city, a condition encouraging the casual approach that epitomizes Southern California living. But make no mistake, under all that sunscreen there’s nothing low key about the retail market here. Sales are thriving, including apparel, which is seeing sales gains of 7.8 percent over last year.
The dress code for most occasions may be short sleeves and bare toes, but that’s not stopping women who want to shop and have plenty of choices for pursuing that desire, from global chains to eclectic specialty shops. Santa Monica’s edge is that it is attracting a diverse base being fed by rampant tourism, a loyal local segment and an influx of dot-com companies with droves of high-paid techies in tow.
The action is gathering at several hot spots. The Promenade, also known as Bayside, is where trendy “West-Siders” mix with new media execs while they shop for megabrands at flagship stores. Main Street and Montana Avenue are where the locals and others go to find specialty boutiques and custom services.
Santa Monica is riding a wave of new media activity; of the more than 140 new business licenses issued by the city during May 2000, for instance, 33 went to high tech companies.
“The advantage of having the high tech industries or an Internet service provider moving in is that the salaries are very high. They have extra money to spend and they’re doing it throughout the city,” said Gwen Pentecost, senior administrative analyst for the city of Santa Monica. She said overall gross taxable sales for 1999 (not including professional services), was $178 million, up from the previous year’s $160 million.
Santa Monicans are generally a well-off bunch, with preoccupations about health and the environment infusing their lifestyle choices. They buy their food at organic emporium Wild Oats and dine out at veggie haunts such as Votre Sante. The generation of actors, lawyers and dot-com entrepreneurs under 30 go for dinner and drinks to The Buffalo Club, a place hip enough to be unlisted; to 17th Street Cafe and to Porte Fino, a shoe-box sized Italian place on Montana.
Tourists, both international and regional, descend in droves. Occupancy rates in the city hotels are a staggering 85.5 percent, according to PKF Consulting. The high occupancy and commercial activity support each other with hotel guests attracted to nightlife and shops that stay open later than in most other retail centers.
The locals have also seen the demand for retail space pushing the city’s revitalized downtown Bayside district beyond its original parameters — Wilshire to North Broadway, including Second, Third and Fourth Streets.
On the Promenade
Referred to by Angelenos as “the Promenade,” Bayside, which is located just two blocks from the beach, is one of the few real pedestrian areas in Los Angeles.
With a power slate of retailers such as Banana Republic, Lucky Brand, French Connection, Abercrombie & Fitch and Urban Outfitters flanked by more than 75 restaurants and 17 movie screens, the Promenade attracts Angelenos from all parts of town.
For retailers, the Promenade provides a key destination in the West, affording a confluence of traffic from more than two million tourists annually and about 15,000 in local foot traffic each summer.
“What’s great about Third Street is that it draws from a very broad base — about 50 percent tourist and 50 percent local, as well as the entire Westside and out into the Valley,” said Trent Merrill, executive vice president for Lucky Brand.
Lucky opened its 3,300-square-foot store north of Wilshire Boulevard in 1998 on what was then one of the center’s quieter blocks. The addition of J. Crew, Banana Republic and Barnes & Noble has made the location a prime spot.
The Lucky Brand store sells men’s, women’s and children’s denim and related tops and accessories to an 18-to-50-year-old customer, with an average retail price point of $68.
Though he declined to give yearend figures, Merrill said the Promenade is among the top performers in Lucky’s chain, with sales up by 53 percent from 1999 and up 7 percent above this year’s plan.
A relative newcomer to the block, Puma opened its concept store at the Promenade in October 1999 and is now 40 percent ahead of plan for its first year, according to Tom Ulrich, vice president of retail for Puma North America.
Ulrich said being part of a fashion community in the Promenade goes along with Puma’s new outlook. The concept store, which includes branded footwear and apparel, has 50 percent repeat business from a youthful consumer. More than 70 percent of his shoppers are 30 years old or younger.
“We’re not rolling out a chain of stores, so typically we’d go to shopping centers, but we are unique and we couldn’t create the same structure in a mall environment.”
When global brand French Connection went shopping for a retail location for its California flagship store, a hip urban location with international tourism was key, according to Gerard Camme, executive vice president, stores and operations.
French Connection’s Third Street store opened April 1996 and has since shown substantial revenue increases for the third year in a row, becoming one of the chain’s top three to five performers out of 21 stores nationwide.
“The entertainment aspect, not just fashion but home furnishings, and other diverse offerings allows people to spend the entire day there. Evenings there are incredible,” said Camme, speaking from New York.
For summer 2000, women’s denim, novelty skirts, halter tops and sleeveless tops were among French Connections best offerings. For men, it was knits and print wovens.
As for challenges in that location? “We will continue to address the 18-to-35-year-old, very fashion-forward customer, who always wants what’s next,” said Suzanne Humbert, executive vice president, merchandising, also commenting from New York.
The 10-block stretch of Montana Avenue (from Seventh to 17th Streets) has an upscale retail mix and European vibe that reflects its sophisticated neighborhood shopper. Director Steven Spielberg buys custom-designed suits from Montana’s tailor to the stars, Ray Montalvo, and local resident Meg Ryan has been spotted among the celeb shoppers who frequent the Avenue’s specialty store mix.
“Young families, moms in their mid-to-late 30s, eat at the local cafes and take walks on Montana,” said Nicole Wachs, co-owner with her father Bob Wachs of Sara’s, a contemporary shop on 14th Street and Montana.
Wachs nails the look favored by many of her customers: “Michael Star T-shirt, cropped, baggy low-waisted pants, flipflops, Chloe sunglasses and a Fendi purse. Hair in ponytail and an Earl jean jacket.”
That customer buys many of those items at her store, which she transformed from an Asian-import and clothing boutique in March 1998.
Sara’s resources for moms and teenage daughters include hip sportswear, T-shirts and denim from brands such as Jane Doe, Michael Star and Earl.
“My customer has disposable income and is really into that West Side casual look,” said Wachs, 26, who has seen business increase about 15 to 20 percent from last year’s figures. Wachs is predicting $3 million for yearend 2000 sales, which she attributes to the strong economy and the emphasis she’s put on customer service and visual merchandising.
“Montana Avenue does not have the honky-tonk of Third Street, said Bob Wachs, president of the Montana Avenue Merchants Association. “This is a high-end boutique and specialty area, featuring gift stores, jewelry, antiques and furniture.”
Montana retailers pay into the association based on annual sales, and those sales are up, according to Wachs. He projects $150 to $250 million for gross revenues from all businesses on Montana for yearend 1999. Despite a prime cost of $5-$6 per square foot for commercial space on the Avenue, 20 new tenants are expected to open doors during the next 12 to 15 months.
“People come to Montana for something special,” said Jane Walker, who has been the manager of Three Bags Full for 15 years. Walker sells imported hand-knit sweaters, some of which take more than 100 hours of handwork from designers such as British label Marion Foale to a clientele paying $350 to $400 for an average purchase. Owned by former sociology professor Bernard Faber, the store emphasizes personal service such as personal shopping. The store sends cards to let clients know when special orders are in and presents four to five trunk shows a year.
Three Bags Full sold $870,000 for yearend 1999 and hopes to hit $1 million by next year. Up the street at Mattias, women in the their early 20s to 50s shop for hip novelty pieces from Francois Girbaud, Whistle from London and Eplay from Italy, as well California designers such as Chertok Yi and Ticci Tonetto.
“We’ve got something for women who are very fashionable; they have happening figures and want to show them off,” said Liat Mattias Zuckerman, who co-owns the store with Dvora Attia.
“Business is up 35 percent over last year, and I think it’s that our store is unusual plus there’s an increase in foot traffic on Montana.” Mattias Zuckerman noted that in general, people are feeling more comfortable about spending money because of the strong economy.
Santa Monica’s Main Street, home to the first Starbucks and more recently Armani A|X and Banana Republic, is better known for its cadre of specialty stores.
Shoppers looking for vintage dresses and bridalwear visit destination store Paris 1900 On Main Street. Owner Susan Lieberman opened in 1976 and has watched Main Street come of age.
“When I arrived, it was a sleepy local shopping strip of thrift and antique stores with a very local clientele. Throughout the Eighties, it grew to include many more restaurants and boutiques. Today we have Wolfgang Puck, The World Cafe, as well as chain stores that have raised rents and caused smaller specialty stores to move over to Abbott Kinney [in Venice].
Down the block, rookie arrival Monkie, which opened earlier this year, caters to a hip, professional woman, average age 30, with a mix of L.A.-based and European streetwear brands and accessories. Owner Jolanda Messmann, a Dutch native, stocks Lady Soul and Stella Forest, as well as locals Lili Rose and Talking to Angels.
“We want to create an atmosphere that’s fun to shop, with a sense of discovery. It’s a casual look here, feminine, modern and a little European.”
Much like Santa Monica itself.