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The Golden State has long been a premier breeding ground for national retail chains, and specialty chains in particular. Anaheim-based PacSun is no stranger to triple-digit profit jumps. And music-influenced, City of Industry-based Hot Topic is also consistently remarkable for its double-digit same-store sales increases. And at present, all eyes are on whether the privately held powerhouse cheap-and-chic emporium Forever 21, based in Los Angeles, will turn public.

This story first appeared in the January 22, 2004 issue of WWD. Subscribe Today.

Yet California holds other fledgling success stories, each contributing to the state’s total $300 billion in annual taxable retail sales. Here is a look at some homegrown specialty shops with the potential to flourish.

AMBIANCE
San Francisco

Ambiance’s three junior/contemporary stores in San Francisco are known for special-occasion dresses; sexy, lace-trimmed T-shirts, and vintage floral tops and skirts as much as the Thirties-style, Old World-inspired decor. The stores are the opposite of minimalist, selling everything from Art Deco jewelry to vintage furniture and lamps. The labels tend toward the contemporary — Trina Turk, Ann Ferriday and Joe’s Jeans — yet the stores also carry juniors resources XOXO, To the Max and Free People. “We really believe in a lot of selection,” said Donna O’Leary, who’s owned the shops with her husband, Kieran, since 1996. “It’s crowded, sort of like a treasure hunt.”

The strategy appears to be working: Average sales top $1,300 per square foot. Stores range in size from 700 to 2,400 square feet. And there are plans to expand the 700-square-foot door on 24th Street by another 1,000 square feet, as well as open a fourth unit as real estate becomes available.

THE CLOSET
Costa Mesa, Huntington Beach; coming soon to Newport Beach and Tokyo

Whether on Main Street in downtown Huntington Beach or its Triangle Square mall location in Costa Mesa, The Closet is the place to take in the cool. This is the epitome of California casual or, as owner Billy Stade puts it, with more than a hint of irony, “California Couture.” “We take the best of action sportswear and meld it with the best of California contemporary. It’s accessible, yet it’s very designer-oriented. But,” he’s quick to add, “there’s nothing froufrou about it.”

Wall murals by important lowbrow artists, polished concrete floors and white minimalist shelves lend style but still let the clothes do the talking, including young contemporary labels Citizens of Humanity, Paper Denim & Cloth, Diesel and Stussy. Customers, hailing from surrounding Orange County and as far as Japan and France, have skipped through the doors to the tune of $600 per square foot on average. Both stores are in the 3,000-square-foot range.

Stade, who has run the two shops with his wife, Kari, for a decade now, is gearing up to open a third boutique at Newport Beach’s tony alfresco mall, Fashion Island. After that, it’s Tokyo. Why go all the way to Japan? “If there’s one thing I’ve learned in the business, it’s that clothing is like art. There’s nothing objective about it. We have an international mind-set. And Tokyo is just like us.”

PLANET FUNK
Hollywood, Pasadena, Sherman Oaks, West Los Angeles, Palos Verdes, South Bay, Los Angeles, Brea and Santa Monica

“Our motto is ‘Do whatever it takes,’” said co-owner Oren Hayun, who has run this mall-based nine-unit Southern California chain with brother Noy Hayun for six years. Its strength: It offers its core young contemporary audience slightly more sophisticated offerings than its teen retail counterparts. Frankie B., Von Dutch and Juicy Couture hang against the chain’s mod decor. Light green and blue tiles, mid-century fixtures and slate floors are as energized as the soundtrack. Stores range in size from 1,500 to 3,000 square feet.

“Our goal is to provide fashion-forward products to the masses at reasonable price points in the $130 range,” added Hayun. And the concept has worked, with some stores racking up as much as $1,000 per square foot in sales. “We’ve spent a lot of time focusing on who our customer is and adjusting our product mix to suit those requests.” And those requests have lead to Planet Funk introducing men’s merchandise for spring.

SUGAR/SPICE
Westlake Village, Calabasas

Retail veterans Bruce and Stella Campbell have created a $900-per-square-foot moneymaker with a retail concept called Sugar, and another called Spice. The 2,400-square-foot contemporary Sugar concept, with a door in outdoor center Westlake Village and another at The Commons in Calabasas, is where stylish 16- to 60-year-old suburbanites get their fix of contemporary resources Michael Stars, Ella Moss and Billy Blues.

Its 1,600-square-foot sister concept, Spice, six doors down from Sugar in Westlake, has attracted an equally sizeable following among women 35 and up looking for a taste of upper-moderate lines Sheri Bodell, Sue Wong and Nanette Lepore. But don’t file the latter under “misses.” These women are fit, insists Bruce. The stores’ retail tracking system records a majority of sales in small sizes, bright colors and skimpy silhouettes.

The Campbells undergo a seven-year itch of sorts, having renamed and reinvented their retail ventures several times over the last 40 years, running up to 10 stores at one time. But Sugar and Spice, which opened in 1996 and 2002, respectively, may stick around awhile. Observed Bruce, “We’ve never had successful stores like this before.”

ACTIVE RIDE SHOP
Chino, Rancho Cucamonga, San Dimas, Brea, Irvine, Temecula, Escondido and Corona del Mar

It’s immediately apparent from the dozens of hot pink mannequin heads on one wall and the locally generated graffiti art on another that Active Ride Shop is not the run-of-the-mill surf and skateboard shop. Besides generating foot traffic through its eight units located primarily in freestanding locations throughout Orange, San Bernadino and San Diego counties, the family-owned-and-operated board shops print 2 million mail-order catalogues a year.

Among the surf and skateboards for sale, the leading category labels are there — Hurley, Roxy, Stussy and RVCA. Recently the owners asked girls what more they wanted, and the answer they got was nonaction sports brands such as Seven For All Mankind, Miss Sixty and Diesel. “We’re a classic sport shop but we cater to the fashion of Southern California,” said vice president Shane Wallace.

Analysts estimate the 15-year-old chain racks up sales between $500 and $600 per square foot, with average store sizes between 5,000 and 6,000 square feet. “Sales of soft goods are what really drives our business,” Wallace added, noting that a women’s-only catalogue will launch in 2005. “We realize it’s all about the girls right now.”

FALLOUT
Brea; coming this March, Costa Mesa, Mission Viejo and Riverside

Tom and Leslie Moore are converting all four of their Southern California stores formerly known as Beach Access to the new moniker to bring a stand-alone flavor to their mall locations — and more of a “core” sensibility to its offerings. There are plenty of hot surf and skate lines, including Billabong, Volcom, Hurley, Paul Frank and Triple Five Soul.

Concrete flooring and exposed ceilings give the space an industrial vibe. Ditto the locally cultivated art on the walls, oversized lighting fixtures, surf videos flashing from a shelf high up the wall and ticker-tape-like messages (for instance, when the next sale is on). “It’s a feeling of how kids are today,” said Thom McElroy, the retailer’s brand consultant.

Analysts project $600 per square foot in sales. Most stores range in size from 2,500 to 4,000 square feet.

M. FREDRIC
Manhattan Beach; Encino, Brentwood, Studio City, Calabasas and Westlake Village

The secret to running a 19-unit Southern California chain located in outdoor centers and on main streets is to make each door feel like an independently run neighborhood boutique. So believes owner Fred Levine, who owns the 23-year-old M. Fredric with wife Lisa and her sister Mardi Fox.

To be sure, what distinguishes the contemporary and upper-moderate store from other shops is its wide assortment of California-based resources, running the gamut from women’s ready-to-wear and women’s active to intimate apparel and kids. Niche lines include Jake’s Dry Goods T-shirts, Major De Lema knit activewear and Billy Blues pants. Stores resemble giant closets with brick walls, hardwood floors and clothes galore. Well, make that a clean closet. Despite the abundance of merchandise, it doesn’t look cluttered.

Workshops train sales associates to be on a first-name basis with clients and to help them buy items that flatter. “Being warm and friendly is a priority for us, and I think that’s what creates the loyalty even more than the merchandise,” Levine said.

Sales average from $500 to $1,000 per square foot, depending on location, with store size ranging from 1,000 to 3,000 square feet. The search for new locations is under way, but there are no 600-unit chain aspirations here. Insisted Levine: “We want customer loyalty rather than a big name.”