Retail Detail. The L.A. Boutique Closing Epidemic


L.A. is suffering from an epidemic of closings and downsizing which has really hit high-profile specialty boutiques.

From Rodeo Drive to Melrose Avenue the economic reality has rocked merchants on some of the Los Angeles region’s best-known shopping streets. The shutdown of boutiques like Tracey Ross, which closed on New Year’s Eve after 18 years in business, is becoming commonplace.


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Stores that have closed in recent months include agnès b., Danmark, Diabless, Magenta, Presse, Il Primo Paso, Parasuco, Tryst and Vanity.

According to WWD, Lisa Kline, who has two namesake stores on Robertson Boulevard and one on South Beverly Drive in Beverly Hills, wants a retailer to take over the lease on her 2,500-square-foot Beverly Drive unit. Sergio Rossi has closed its Melrose Place store which has just opened last spring (actually the Italian brand is closing all of its U.S. locations).

Rock & Republic wants out of their North Rodeo Drive space it leased for 10 years last spring and is trying to find a retailer to sublease the store. Ron Herman, with stores on Melrose Avenue and in Malibu and Brentwood, is looking to sublease about 2,000 square feet of his estimated 5,000-square-foot store on North Beverly Drive.

“There’s a lot of [boutique] saturation out there — some people do it better than others,” Ross said. “When nobody’s been shopping for a while now, it becomes foolish to throw in more money.”

Meanwhile, monthly rents along Robertson Boulevard are said to have plummeted to $10 to $15 a square foot from $15 to $30 last year.

“The rents were outrageous, and they’re coming down as fast as they went up,” Tracey_ross Kline said. “At those rates, you’re working for the landlord. The street just wasn’t that hot to pull those prices.”

As a result, tenants are renegotiating leases in the short term and asking landlords for concessions and amenities which benefits both parties.

“Once people leave, you’re stuck with a vacant space,” said Luchs of CB Richard Ellis real estate, who has brokered many leases on Robertson Boulevard and Rodeo Drive. “It’s much harder to get someone in once the space is empty. It’s better to renegotiate to keep the space occupied and some money coming in.”

In an effort to slash overhead even further, more merchants are starting to carry their merchandise on consignment.

Kitson, Belle Gray, Lisa Kline and others said they have dramatically increased the amount of consignment merchandise being stocked, a practice once limited largely to accessories and jewelry.

The California economy has been especially hard hit by the recession. The state’s unemployment rate of 8.4% in November was among the highest in the nation. Gov. Arnold Schwarzenegger has declared a fiscal emergency because of a budget crisis as the state faces a projected $40 billion deficit over the next 18 months. In fact, state government might run out of cash by February 1.

Despite the troubles, there is opportunity for stable retailers with cash on hand as lease rates drop.

Read "L.A. Specialty Boutiques Rocked by Shutdowns" here.

Source & Photos: WWD

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