California Apparel News

Los Angeles veteran retailer American Rag Cie is setting up shop in California’s Orange County, joining a growing cadre of international luxury retailers and contemporary boutiques in the region.

Orange County shopping mall giant The Irvine Co. announced that American Rag would move into a 12,500-square-foot space at the Fashion Island shopping center in Newport Beach, Calif., in September 2006.

Irvine Co. also announced two more tenants that will help sharpen Fashion Island’s contemporary style. Dutch denim maker G-Star and sportswear brand Original Penguin, a division of Perry Ellis International Inc., will open stores in the shopping center in spring 2006.The Newport Beach Original Penguin store will be the third boutique opened by the brand, which also has stores in New York and Miami. The Miami store will open Dec. 1.

American Rag Cie has been a fixture on Los Angeles’ La Brea Avenue and San Francisco’s Van Ness Avenue for more than 10 years. Mark Werts, the retailer’s founder and chief executive, said the move to Newport Beach is part of a slow but steady expansion for his company. Still, he noted the American Rag chain would never be large. “Our clientele is selective, and it’s difficult to feel selective when shopping at a chain of 400 stores,” Werts said.

American Rag took a 10-year lease at Fashion Island, according to Werts. He said the Fashion Island store would be an “evolved” version of the American Rag store in Los Angeles. The Fashion Island store will feature an 84-seat Maison Midi Cafeacute;, a jeans bar built in collaboration with Levi Strauss, vintage and new clothes, as well as sections for footwear, music and housewares.

Although American Rag already carries up-and-coming Orange County brands such as Trovata, Werts said he has been talking to Orange County fashion executives such as Richard Wolcott, chief executive of Volcom, and was interested in carrying more brands with Orange County roots. “We’re going to be sensitive to our local customer,” Werts said.

Werts had been considering the possibility of opening a store in Orange County since the 1980s. Over the years, he noted that a significant number of the customers at the Los Angeles store were from Orange County, taking note of addresses on credit card receipts.

When, in 2004, a real estate executive from Cushman & Wakefield failed to convince Werts to build a location in Manhattan, N.Y., due to the logistics and costs of managing a store from Los Angeles, the real estate executive then asked if Werts would consider expanding closer to his base of operations.

More contemporary stores

Orange County has become a growth market for hip, contemporary retailers in the past 10 years. Such stores as Co-Op Barneys New York, and Metropark, based in City of Industry, Calif., and Orange County–based businesses such as The Closet and Erica Dee have found success peddling premium denim and up-and-coming brands that once were the domain of urban boutiques.

The market for contemporary boutiques “has expanded by leaps and bounds since I opened my store more than four years ago,” said Erica Thomas, president of Erica Dee, based in Corona del Mar, Calif. “Before then, there were no trendy boutiques with funky, contemporary lines in Orange County. Orange County people had to drive to L.A. Now Los Angeles stores are seeing there’s a contemporary market down here.”

The growth of the contemporary market has influenced real estate decisions at Fashion Island. “Fashion is a good investment,” said Stephanie Rosanelli, an Irvine Co. director of leasing. She said her customers are more urbane than in the past and looking for more sophisticated clothes.

Other Fashion Island retailers say that American Rag will create more opportunity, even if it means occasionally competing against the current tenants. “There’s some crossover,” said Billy Stade, president of The Closet, the contemporary lifestyle store specializing in brands such as Modern Amusement, Trovata and Howe. “But it’s not a threat. It’s going to help the center. It’s going to bring more stylish people to Fashion Island.”