California Apparel News

The area known as The Intersection in Los Angeles— where the California Market Center, The New Mart, the Cooper Design Space and the Gerry Building meet—has been and still is the prime hub of apparel wholesaling in the city. But the submarket off nearby San Pedro Street is making a bid for the area’s juniors business with row after row of new showrooms.

The latest project in the pipeline is the Los Angeles Fashion Center at San Pedro and 14th Place, fronting the Santa Monica freeway. Developers have received building permits and are set to start construction on a five-story, 194-unit building that will house mostly women’s apparel wholesalers. Set on the far southeastern border of the Los Angeles Fashion District, the project extends the San Pedro wholesale corridor, which has been on a construction tear during the past two to three years.

Operators of the successful San Pedro Wholesale Mart a few blocks north set the pace for business a few years ago with a mall-like, high-density environment. An annex was completed last year and quickly leased. Another new project, the American Garment Center (AGC) at San Pedro and Pico Boulevard, opened earlier this year and is nearly sold out.

Demand is coming from independent retailers who enjoy the in-stock programs and cash-and-carry business that are often associated with this part of the fashion district.

Apparel merchants along San Pedro cater mostly to the quick-turn juniors business that brings the trend of the moment to the market as quickly as possible.

“It’s a different concept. The people here are different, and the pace of business is different,” said Joseph Rahbar, leasing agent for San Pedro Properties, which operates the AGC.

“The buyers here see what they like. They get it and go,” said Yuri Smit, owner of White Palace Inc., which sells juniors brands Cappuccino, Bebina and 5th Element out of the AGC.

Rahbar said after opening the AGC at the beginning of the year with 27 units, he now has only three left. “With the exception of a few vacancies elsewhere, there will be none left at the end of the year,” he said.

Most of the buyers are independents, but some showroom reps said they see majors, as well.

The Los Angeles Fashion Center, known as LAFACE, will not be completed for another 11/2 years, said architect Ray Kang of M.A.I. Architects Inc. in Los Angeles. Kang’s renderings show a sprawling 600,000-square-foot complex with five floors of mall-like showrooms set behind a modern concrete exterior.

Showrooms will be between 1,000 and 2,000 square feet. The developer has already sold the property to private investment group Los Angeles Properties LLC.

What is different about this project is that the units will be offered as condominiums, allowing tenants to purchase the space as an investment and have control over how to run the property.

Getting space in this part of the fashion district, whether bought or leased, is a bit different from getting a showroom at The Intersection. Long-term leases are not the norm, and sometimes potential showroom owners encounter unorthodox ways of doing business.

“We don’t lease by the square foot,” said Rahbar of AGC. “You come down, look at the space, and I’ll give you a price.”

The new business along San Pedro does not appear to be posing any problems for the city or the Los Angeles Fashion District Business Improvement District, said BID Executive Director Kent Smith. “If you’re trying to get the attention of the buyer, this is the place you have to be, the fashion district, so that’s why they’re coming,” he said.

The BID markets the area to buyers and consumers as well as provides sanitation and security services for property owners.

How much longer can construction continue at this pace?

“I asked myself the same question when I came here,” Smith said. “Developers have taken a lot of the surface parking and converted it to structured parking within their properties. Along with the space the residential properties have taken, there’s not much left now.”

Smith added that most of the wholesale business is pushing east as more retailers are taking space and building new space along Santee Street and Maple Avenue. —Robert McAllister