California Apparel News

West Hollywood, Calif.–based retailer Maxfield is one of the high-marquee boutiques in Los Angeles, and perhaps its highly anticipated new Maxfield location will help buck a rough economic trend.

A 2,000-square-foot Maxfield is scheduled to open June 1 at Malibu Lumber Yard, a boutique center. Richard Sperber and business partner Richard Weintraub developed the boutique center on an idyllic 32,000-square-foot space located across from the Pacific Ocean. It will be the first retail development for Malibu since the Los Angeles County colony for celebrities and the very wealthy was incorporated in 1991, according to city officials.

The exterior of the Malibu Maxfield will be covered in weathered wood from a 95-year-old barn. Other tenants for the retail center include boutiques for nationally known fashion brands James Perse, Tory Burch, Alice + Olivia and Los Angeles retailers such as Planet Blue Kids and Kitson Men. It will offer J. Crew concept J. Crew-at-the-Beach. This unique J. Crew boutique will edit the J. Crew collection with the Malibu lifestyle in mind. Malibu Lumber Yard, which is 90 percent leased, will feature aquariums, a courtyard with a play space for kids, restaurants and architecture that blends elements of a beach deck and a lumberyard.

Sperber and Weintraub’s development company, Malibu Lumber LLC, spent $25 million to construct the project. It was built on the grounds of a former lumber store and is located adjacent to the Malibu Country Mart retail center, home to exclusive shops such as Ron Herman, Ralph Lauren, M.Fredric and John Varvatos.

Sperber and Weintraub said they hope Malibu Lumber Yard will be the first retail center to lead the shopping-center industry out of an economic slump. In 2009, only 90 million square feet of retail real estate will debut in the United States, down from the 131 million square feet developed in 2008, according to research from Encino, Calif.–based real estate company Marcus & Millichap.Retail vacancy in Los Angeles County increased to 4.5 percent in the first quarter of 2009, compared with the 3.7 percent retail vacancy rate the last quarter of 2008, according to Costar Group Inc., a commercial real estate information company based in Bethesda, Md.

More West Coast development

Malibu Lumber Yard will be one of the first in a handful of California retail-center developments to debut after the economic crash of 2008. The Promenade at Camarillo Premium Outlets will debut April 23 in Camarillo, Calif., located more than 50 miles northwest of Los Angeles.

Developed by the Chelsea Property Group, a division of shopping-center developer Simon Group, the 220,000-square-foot-outlet center will feature tenants such as Neiman Marcus Last Call, Tommy Bahama, Vans and Zumiez.

On May 7, The Promenade at Westfield Santa Anita, a $120 million project, will debut in Arcadia, Calif., which is 16 miles northeast of downtown Los Angeles. It is the lifestyle-center addition to Westfield Santa Anita. The promenade will be anchored by a remodeled Nordstrom.

In the fourth quarter of this year, Westfield also will debut Westfield Culver City, the remodel of the Westfield Fox Hills mall, just south of Los Angeles. The remodel will feature 340,000 square feet of new retail space, including a new Target store.

If they are fortunate, these retail centers will debut a few months before the economy turns around. The economy is forecast to improve in the second half of 2009, according to Michael Niemira, chief economist of the International Council of Shopping Centers, a trade group for malls.

Any gratification for immediate profits will be delayed, Sperber said. He expected profits to start flowing in perhaps after a couple of years in business. His company leased the site of his retail center from the city of Malibu for 39 years. It has the option of extending it to 54 years. The developers’ deal with the city demands the retail center pay $925,000 annually to the city. The city also will receive 30 percent of the mall’s profits when they go north of $2.2 million.

The city of Malibu also placed guidelines on the Lumber Yard development so it would become a mall unique to Malibu. First, 10 percent of the mall space would be dedicated to local businesses. One of these businesses will be Dance Star, a children’s dance studio. Its rent will be priced at $5 per square foot, well below the more than $25-per-square-foot rate for national tenants at the retail center.

Per city guidelines, Malibu Lumber LLC also had to spend $3 million on an eco-friendly wastewater-treatment system for the retail center. The city of Malibu has been long criticized for its antiquated sewage system and relies on septic tanks to dispose of waste.

The city’s demands may seem onerous, but Sperber might have a head start to making profits. Malibu’s median household income is $102,031, according to the 2000 Census. Kitson owner Fraser Ross said he felt comfortable in opening his seventh Kitson location at Malibu Lumber Yard because the area is so wealthy. (It is scheduled to open in June.) He compared it to opening a shop in the Hamptons, the exclusive seaside resort area in New York where Manhattan’s wealthy go for weekends and summer breaks.

The emphasis would be on beach-style fashions with a refined, luxury edge. “It’s like being in the Hamptons or St. Moritz,” Ross said of Malibu. “People don’t care about spending a lot of money on a bottle of wine at these places,” he said.

Ross forecast his 2,200-square-foot Kitson Men store would get half of his traffic from Malibu locals and students at Pepperdine University, which is located a few miles away from the retail center. The other half would be tourists.

Stacey Bendet, founder of Alice + Olivia, also planned to focus on beach looks at her store. It will offer Alice + Olivia swimwear as well as swimwear from a couple of other brands such as Vitamin A. The 1,100-square-foot boutique will offer exclusive product from Alice + Olivia as well as daywear and eveningwear. Bendet’s company also runs a boutique on Los Angeles’ high-profile Robertson Boulevard. For the Malibu store, Alice + Olivia will also carry its men’s line, Anthony + Mo, and Alice + Olivia Kids.