California Apparel News

The new owners of the beleaguered Hollywood & Highland shopping center are planning more punch to their retail mix this fall by adding some trendy stores to draw local shoppers.

BCBG Max Azria and American Eagle Outfitters will open stores this autumn. Shaul Kuba, partner and co-founder of CIM Group, the Hollywood-based real estate company that acquired the 645,000-square-foot complex in February, said he is talking with Lucky Brand Jeans to join the other two popular retailers at the shopping center.

“The goal is to be a fashion mall, an apparel center,” Kuba said. “Hollywood will be a fashion destination like it used to be in 1960.”

Kuba and his CIM Group partners, Avi Shemesh and Richard Ressler, are hoping that a new focus on apparel, family entertainment and a mall redesign will attract local residents, not just the tourists who make up the majority of visitors to Hollywood & Highland.

Retail analysts such as Al Frank, partner in charge of consumer business at the Los Angeles office of Deloitte & Touche LLP, said attracting locals to Hollywood & Highland will be difficult due to missteps when the mall opened a few months after the Sept. 11, 2001, terrorist attacks. But a revival is not impossible for the mall originally valued at $630 million.

Hollywood & Highland stumbled soon after Chicago-based Trizec Properties Inc. opened the shopping center. Anticipated tourist traffic dropped to a trickle and local consumers criticized the shopping center for its poor lighting, expensive parking and confusing layout divided into two sections. One shopping section surrounds Babylon Court, known for its towering white elephants and gray arch modeled after D.W. Griffith’s silent film “Intolerance.” The second shopping area is the Awards Walk, a two-story area referred to as the “Corridor of Death” by some less-than-successful retailers located there.

“You only have one chance to make an impression, and a lot of people in Los Angeles gave Hollywood & Highland a first chance and cut them off,” Frank said. “But everyone is looking for something new to do. That’s why they have a chance. You’ve got to give people an excuse to go visit or not to visit. If parking is a problem, it’s an excuse not go there. If it’s not fun, they won’t go. They need to eliminate the list of excuses not to go there.”

Remodeling for success

CIM Group’s prescription to fix Hollywood & Highland’s most stubborn structural problems tentatively start in 90 days when construction begins on a redesign.

Better lighting will be installed in the central escalator area leading from the subterranean parking structure to the center’s main shopping floor. The escalator is best known for its pop art hanging piano sculpture. Kuba and Shemesh also mentioned plans to put in better signage to direct motorists in and out of the garage.

Kuba complained that the shopping center’s main plaza, Babylon Court, is too gray. He plans to inject color into it by adding more signage. That includes retailers’ signs and plasma screens. Some of the screens might show snippets of Ryan Seacrest performing on the Fox TV show “On-Air With Ryan Seacrest,” which is broadcast from Hollywood & Highland. Other screens would broadcast movie trailers for films playing at Grauman’s Chinese Theatre located next door.

The new owners plan more family entertainment and events at Kodak Theatre that will entice the public to the shopping mall. Kodak Theatre is the 3,600-seat venue that hosts concerts, musicals and red carpet events, such as the annual Academy Awards.

The shopping center also plans to introduce a VIP card program where local shoppers can use their cards for discounts at Hollywood & Highland restaurants and movie screenings as well as free valet parking during certain hours or days.

Almost a full house

The CIM Group partners said reintroducing the mall will take time. “We knew all of the challenges before we bought Hollywood & Highland,” Shemesh said. “There is no silver bullet.”

CIM Group purchased Hollywood & Highland for $201 million. While the shopping center experienced troubles, it also claims successes. Shemesh said more than 15 million people visit Hollywood & Highland annually and 90 percent of the 387,000 square feet of retail space is occupied.

More than 70 percent of the mall’s retailers have been showing strong sales, averaging $600 to $1,000 per square foot a year. Thirty percent earn $300 to $400 per square foot, Shemesh said.

Many retailers believe the shopping center’s location gives it a valuable cachet. “Opening a boutique at Hollywood & Highland shopping and entertainment complex is a fantastic opportunity for us,” wrote Max Azria, founder of BCBG Max Azria, in an e-mail. “It will give us access to the millions of local visitors and tourists that visit the complex and further elevate the international visibility of BCBG Max Azria.”

Key property

Hollywood & Highland also is the linchpin to CIM Group’s efforts to revitalize Hollywood. The company is one of the largest property owners in the area, with more than 1.4 million square feet of retail in buildings neighboring Hollywood & Highland. The buildings include: TV Guide Hollywood Center, Hollywood Galaxy, Hollywood Orange, Hollywood Cherokee and the Woolworth Building.

As part of the Hollywood scene, Kuba said the new apparel retail focus will embrace fashionable streetwear with a touch of designer boutiques. The shopping center currently houses more than 14 top-flight apparel stores including Bebe, Victoria’s Secret, Banana Republic and Louis Vuitton. Designers’ stores such as Burberry are housed in the duty-free store DFS Galleria, geared for tourists.

Shopping center tenants such as Nathan Prath, a clerk at apparel store Studio, on Hollywood & Highland’s Awards Walk, believe CIM Group’s plan will eventually succeed, but it will have to find a way to compete with other Los Angeles destinations. “Even if we had brands tourists wanted, they’d go to Rodeo Drive to buy them. They want to come here to shoot pictures at the Chinese theater. Some people don’t even know there are stores down here.”