California Apparel News

Complex to Be Renamed California Market Center

The California Mart’s recently announceddeal that will bring in one million square feet of showroom space for the gift industry is being called “a win-win situation” by real estate and apparel industry executives who anticipate the transaction will pump new life into downtown Los Angeles’ Fashion District.

As announced last week, a group of show owners and managers led by the principals of the Dallas Apparel Market are closing a long-term lease with Cal Mart owner Hertz Investment Corp. to renovate up to one million square feet for permanent showroom space to be filled by gift industry vendors.

The group, comprised of the Dallas Market Center, which is an affiliate of real-estate powerhouse Trammell Crow Co., along with show-management company George Little Management LLC and global show producer DMG World Media has signed a master lease and will begin renovating its portion of the two-building mart this fall, with a plan to be finished by next July. The renovation plans include widening corridors and installing floor-to-ceiling glass showrooms up to 40,000 square feet in area.

Cal Mart executives said the configuration of the new layout remains unclear at this point, but it is believed that most of the new tenants will occupy the “C” building, which faces Olympic Boulevard.

One of the biggest changes to come will be the renaming of the entire Cal Mart complex to the California Market Center, although the apparel portion will remain known as California Mart, according to Kit Marchel, executive vice president of marketing and business development for the Cal Mart.

“This is a win-win across the board,” she said. “This will be an amazing combination of industries that should result in constant traffic,” she said.

Bill Winsor, president of the Dallas Market Center, said the renovated mart would be the “premier West Coast buying destination.”

Though the Cal Mart has housed a variety of apparel industry tenants over the years, executives said that the new group will bring a new dimension of vendors that will likely offer everything from fashion accessories to holiday items, home accessories, souvenirs, resort items and licensed goods. The building will go head-to-head with the L.A. Mart, which is located about a mile away at 1933 S. Broadway and also has about one million square feet of showrooms. That building is home to the L.A. Gift Festival, which runs alongside the California Gift Show held at the L.A. Convention Center and is operated and owned by the Dallas Market group.Downtown Buildings Boom?

Some question the viability of another million square feet of gift space. However, the L.A. Mart is at near capacity and showed its value in a $54 million sale last fall to the New Jersey-based REIT, Vornado Realty Trust.

George Little’s vice president of new business, Dorothy Belshaw, said that the additional space should complement the L.A. Mart.

“I think the gift industry is broad enough so that these two venues can become complementary uses,” said Carl Muhlstein, senior director with Cushman Wakefield Real Estate, which represented the sale of the California Mart to its current owner Hertz and last fall’s L.A. Mart sale.

“The [California Mart’s] neighbors should be cheering this move,” he said. “There may be some dislodging of tenants, and they will want to stay close to the California Mart since that’s the gateway to the fashion industry.”

Steve Needleman of Anjac Fashion Buildings said he was a bit skeptical about demand for more gift space but concluded, “[The additional space] will bring more people downtown, so who can argue with that? The Dallas people know what they’re doing.”

Downtown real-estate executive Mark Weinstein said he thinks the timing on this deal is perfect for his company, which is renovating the Gerry building at the intersection of Ninth and Los Angeles streets into 150 showrooms for misses, menswear and contemporary-apparel vendors.

Weinstein said he expects higher rents at the Cal Mart, along with the cramp on space, to play into his favor.

“For business downtown, bringing in major tenants is good for the economy,” he said.

Ilse Metchek, executive director of the California Fashion Association and Los Angeles By Design, called the deal “a fantastic happening,” noting, “The relationship between gift and apparel merchandising is more tightly woven than ever before in the eyes of retailers.”

Metchek said she sees two challenges for the industry: “To get the local and state politicians to realize the contribution the [Fashion] District will make to our economy by virtue of the amount of domestic and international business visitors we bring to the city. And to make this an easily accessible ’Market Center’ with the inclusion of the other appropriate buildings and the L.A. Furniture Mart.”

“The merchandising energy emanating from this district will be there for the world to seehellip;it’s just up to us to promote it,” she said. Cross-Market Opportunities

The introduction of gift vendors to the Fashion District should also create some interesting opportunities for cross-marketing, according to Trish Moreno, executive director of creative marketing for the California Mart.

Some are saying the move will return the Mart to its glory days when vacancies were hard to come by and apparel resources were growing by the leagues.

“The synergies of these industries will drive a very positive market effect for everyone involved,” said Marchel.

One of those effects, Moreno added, may be 100 percent occupancy, which should dispel worries from tenants who are in less-crowded portions of the building. On the other hand, existing tenants are also worried about rent increases, parking-lot pressures, displacements and the effects on their businesses.

Moreno said that a “compression plan” will indeed force some tenants to relocate, but who and when remains uncertain. No parking changes have been worked out, and there no immediate plans to raise rents, said Cal Mart executives.

“We will be talking to affected tenants individually,” Moreno said. “Lots of people here are in favor of consolidating apparel into a tighter area.” Tenant Response Upbeat, Though Questions Remain

By and large, the response from Cal Mart tenants was positive. Many said the combination of apparel and gift industries fit with changes in the retailing business.

“More and more retail stores are opening with a lifestyle approach, and this fits perfectly with retailer needs,” said DuPont designer segment manager Karen L. Eways. “In light of industry and retail changes it makes perfect sense so that the Cal Mart can thrive and keep serving its current fashion clients along with introducing new products for retail.”

Hal Kaltman, owner of Hal Kaltman Textiles and member of the California Mart Board of Governors, called the deal “the most exciting thing to happen to the California Mart and the market in years.”

Ann Davis, president of the Textile Association of Los Angeles (TALA), which is a sponsor of the California Mart’s semiannual Los Angeles International Textile Show, praised the alliance as a “great idea.”

“I think it will be good for the downtown area and good for the Cal Mart and good for the tenants of the Cal Mart,” she said. “It will also be good for TALA members because it will give us [a] whole new exposure [to new retailers].”

The board of Pacific Coast Travelers (PCT), a group of sales representatives that hosts a show during Los Angeles market weeks in temporary space in the California Mart, had not had a chance to discuss the deal as of press time, but Jan Morrow, PCT executive director, said he thought the overall result for the building would be positive.

“Overall, I think people are happy that the Cal Mart will be filling its showrooms and bringing in more foot traffic,” he said. “It will also draw diverse retailers into the Los Angeles area and help boost the city’s economy by bringing in out-of-towners.”

Several reps for accessories showrooms on the 10th floor of the Cal Mart said they were looking forward to a boost in business as more accessories and gift vendors moved into the building.

Betty Wells, rep for One Stop Shopping, an intimate apparel and accessories showroom, said that she is excited about the deal.

“It’s going to be a positive thing that we’ll all be together—intimate apparel and accessories,” she said. “Each category can complement [the] other.”

Mindy Lubell, rep for Le Trend Accessories, said she has been in the Cal Mart for twenty years and recalls when it was full. She was excited over the idea because it will give the Cal Mart a greater fullness again.

“I think it’s a great thing,” she said. “I think it will bring more business to Cal Mart.”

There are still some concerns, however. Joanie Graham and Hannah Ha, reps for Sue Wong on the 5th floor of the Cal Mart, said they had only just heard about the deal and questioned the need to relocate showrooms.

“I’m shocked,” said Graham, who added, “If [we moved to] the right area, then fine, but we’ve put a lot of money [into] the showroom.”

Ha said the deal made sense, adding, “We have children’s, men’s and women’s; we should have gifts. But [to move so many showrooms is] such a drastic type of move just to bring in one industry.”

For retailers and boutique owners, the arrival of gift vendors at the Cal Mart can streamline shopping schedules. Tracey Ross, who owns a West Hollywood, Calif., boutique by the same name, said she visits the L.A. Mart and New York for gift items but would now increase her visits to the Cal Mart.

“[The addition of gift vendors] totally appeals to me and gives me incentive to come down there,” said Ross, whose store carries trendy fashions as well as candles, pillows, books, picture frames and perfumes. “It’s one-stop shopping. I can come by for fillers more often. That’s fantastic.” —with contributions by Darryl James, Claudia Figueroa, Nola Sarkisian-Miller and Alison A. Nieder