2009 in Review: Bright Spots and Hard Times in a Difficult Year
It was a year of pop-up shops and retail bankruptcies, a year of anemic retail sales and a flurry of mall openings and renovations.
Among the companies filing for Chapter 11 bankruptcy protection were California-based Gottschalks, Active Ride and Anchor Blue Retail Group, Seattle-based Eddie Bauer Holdings, and Orlando, Fla.–based Everything But Water; mall owner General Growth Properties; and commercial lender CIT Group.
Apparel companies formed new partnerships, and trade shows entered new territories or shuffled formats to reel in more buyers. And it seemed like everybody looked to social networking to help connect with customers.
Despite no central anchor event, the city’s fashion week grew in 2009, with the debut of several new fashion events, including Downtown L.A. Fashion Week, L.A. Fashion Weekend, City of L.A. Fashion Week, Rock Fashion Week and Fashion on Broadway, as well as returning event BOXeight Fashion Week.
Throughout it all, retail sales slowly climbed out of the red, buyers returned to market and the dark mood that marked the beginning of 2009 began to lift. For a look at 2009 in review.
JANUARY
The International Council of Shopping Centers declared holiday 2008 the weakest holiday season since 1970.
Los Angeles retailer Tracey Ross closed her pioneering boutique after 19 years in business. She had started out on Robertson Boulevard and then, after six years, opened shop in tony Sunset Plaza.
Tarrant Apparel and American Rag Cie reached a settlement in their dispute over royalty payments. Tarrant’s Private Brands division produces American Rag Cie apparel for Macy’s stores under a licensing agreement with the Los Angeles–based retail chain.
Childrenswear manufacturers scrambled to meet a February deadline for the Consumer Product Safety Improvement Act, which requires manufacturers to test all components of a children’s garment for lead.
Costa Rica became the last signatory country to join the Dominican Republic–Central American Free Trade Agreement, which eliminates most tariffs and quotas on goods traded between Central America and the United States.
The Action Sports Retailer Trade Expo canceled its Holiday 2009 edition. The show, which was smaller than the January and September editions of ASR, had been operating since 2006.
Gardena, Calif.–based Da-Rue shuttered the last two Ames Apparel stores, the boutique chain Da-Rue acquired in 2005.
Hot Topic enjoyed a retail rally in late 2008/early 2009 thanks to consumer demand for merchandise related to the “Twilight” film.
St. Louis–based Kellwood Co. moved three moderate brands—Sag Harbor, Briggs N.Y. and Koret—to its West Coast facility in the City of Industry, Calif.
California department-store chain Gottschalks filed for Chapter 11 bankruptcy protection on Jan. 14.
FEBRUARY
U.S. chain store sales declined 1.6 percent in January, according to the International Council of Shopping Centers.
The MAGIC Marketplace debuted two new sections at the February 17–19 run in Las Vegas: Premium at MAGIC and Premium at WWDMAGIC.
Quiksilver cut 200 jobs in its Americas region.
Macy’s announced plans to close its divisional offices in San Francisco, New York, Atlanta and Miami and eliminate 7,000 positions, or 4 percent of its workforce. The retail giant said it plans to centralize some of its operations—including finance, human resources and buying—and to open regional offices around the country in May.
Fill-in goods for immediate delivery were key in Las Vegas, where 14 trade shows were spread over six days and 10 venues.
Material World announced plans to “co-locate” with the Los Angeles International Textile Show in September.
Everything But Water Inc., one of the largest swimwear retailers in the United States, filed for bankruptcy.
Canadian fast-fashion retailer Clothing For Modern Times Inc. opened a 23,000-square-foot industrial-style loft design studio near downtown Los Angeles.
MARCH
February retail sales at chain stores declined 0.1 percent, surpassing even the lowest expectations for the month, according to the International Council of Shopping Centers.
Iconic independent boutique Show Pony, located in Los Angeles’ Echo Park neighborhood, announced plans to shutter.
!iT Jeans relocated to a historic building in Vernon, Calif. The nearly 100-year-old building formerly housed a General Electric factory.
Designer Kevan Hall introduced a new daywear collection created in partnership with Paul Lewis, founder of the Paul Stanley brand. The collection, Kevan Hall for Paul Stanley, was introduced at a charity event during Los Angeles Fashion Week.
Showroom owners reported mixed results at Los Angeles Fashion Market, where core buyers placed orders for goods for immediate delivery.
Mira Loma, Calif.–based surf-and-skate retailer Active Ride filed for Chapter 11 bankruptcy protection and closed eight of its 24 locations.
Disgruntled members of the garment- and restaurant-workers union UNITE HERE split to form their own union, called Workers United.
APRIL
March retail sales were better than expected but still declined 2.1 percent overall, according to the International Council of Shopping Centers.
Gottschalks, the 105-year-old department-store chain based in Fresno, Calif., announced plans to shutter all 55 stores.
Business was light but steady at the April 5–7 run of the Los Angeles Majors Market at the California Market Center.
Los Angeles retailer Maxfield announced plans to open a Malibu location in the newly opened Malibu Lumber Yard shopping center.
The April 14–16 run of the Los Angeles International Textile Show drew a mostly local crowd of designers and piece-goods buyers.
Mall developer General Growth Properties Inc. filed for Chapter 11 bankruptcy protection. The Chicago-based company operates more than 200 malls across the country, including more than 23 in California.
Consignment made a comeback as retailers looked for ways to limit their risk and brands tried to break into new stores.
Guess? Inc. co-founder Georges Marciano announced plans to run for governor of California.
The proposed Employee Free Choice Act of 2009, which would change the requirements needed to vote for union membership, drew the opposition of large industry organizations.
Local designers turned out for the April 28–30 debut of textile trade show GlobalTex in Los Angeles.
Focused buyers turned out for an abridged run of Material World & Technology Solutions in Miami Beach, Fla. Organizers of the show said the future was uncertain for the Florida edition. The next run of Material World was scheduled for September in Los Angeles.
The Design Piracy Prohibition Law, which would extend copyright protection to fashion designs, was re-introduced by U.S. Representatives Mill Delahunt, Bob Goodlatte and Jerrold Nadler.
MAY
Expectations were exceeded with a slight uptick of 0.7 percent in retail sales in April, according to the International Council of Shopping Centers.
Fires in Santa Barbara, Calif., forced the evacuation of more than 90,000 residents and drastically cut off business for many local retailers.
The Los Angeles Fashion Center, a new 300,000-square-foot wholesale center in downtown Los Angeles, debuted with 200 showrooms.
The Beverly Center mall briefly shut down on May 18 after an up-and-coming rapper who performed under the name Dolla was shot and killed in front of the upscale Los Angeles shopping center.
The trade dress lawsuit filed by Newport Beach, Calif.–based Trovata against Los Angeles–based fast-fashion retail chain Forever 21 resulted in a mistrial when the jury failed to come to a decision after deliberating for nearly a week.
Ontario, Calif.–based Anchor Blue Retail Group filed for Chapter 11 bankruptcy protection.
A 7.1-magnitude earthquake in northern Honduras killed six people and slowed business at Honduran apparel factories. Although the factories suffered little damage, many workers failed to show up for work in the days following the May 28 quake.
Closures at Mexican factories due to the swine flu outbreak delayed production for many U.S. apparel manufacturers who had to wait for factories to reopen to get their goods.
A growing coterie of upscale sample-sale Web sites provided designers with an outlet to sell overstock merchandise discretely while building brand loyalty among fashion-savvy customers.
New York–based Iconix bought a 50 percent stake in Hardy Way LLC for $17 million. Hardy Way is the company founded by San Francisco–based tattoo artist Ed Hardy, who licenses his name and artwork to several companies, including Christian Audigier’s Nervous Tattoo.
JUNE
Retail sales dropped 4.6 percent in May, according to the International Council of Shopping Centers. Although off-price stores did well, luxury retailers fared poorly.
Forever 21 announced plans to move into 10 former Gottschalks spaces in California, Washington and Alaska. Macy’s Inc. won the bid for Gottschalks’ spaces in Fresno and Visalia, Calif.
Forever 21 announced it would proceed with its plan to develop a plot of land near downtown Los Angeles. The land formerly housed a community garden, which was the subject of an Oscar-nominated film called “The Garden.” The film focused on the dispute between the land’s owner and the group running the garden over the fate of the garden.
The Primrose Building, a new wholesale showroom building in the Los Angeles Fashion District, opened with two planned tenants: Alternative Apparel and Free People.
San Francisco–based Sugar Inc., which runs several lifestyle Web sites, acquired Shopflick, an e-tail site that incorporates online video to sell products.
Buyers placed careful, price-conscious buys at the June 12–16 run of Los Angeles Fashion Market.
Los Angeles Police Chief William Bratton was among the speakers at the National Retail Federation’s Loss Prevention Conference & Expo, which was held June 15–17 at the Los Angeles Convention Center.
Pacific Sunwear Chief Executive Officer Sally Frame Kasaks stepped down from her position, although she remained on the board of the Anaheim, Calif.–based retail chain. Gary Schoenfeld, former president and CEO of Vans and Global Brands Group, was named the new CEO for PacSun.
Bankrupt Mira Loma, Calif.–based retailer Active Ride was acquired by a Florida-based investor group for $5.2 million in an auction ordered by the U.S. Bankruptcy Court in Riverside, Calif.
Columbus, Ohio–based retail chain Express sued fast-fashion giant Forever 21, charging the Los Angeles–based chain with copyright and trade dress infringement.
Huntington Beach, Calif.–based surf giant Quiksilver laid off 168 employees. The company shed 300 jobs in 2008 and another 200 in January.
JULY
Apparel production continued in Honduras despite the ouster of President Manuel Zelaya in a June 28 military coup. But on June 30, Nicaraguan President Daniel Ortega closed the border between his country and Honduras in order to pressure Honduras to allow Zelaya to return.
Contemporary retail chain Kitson settled its suit with Glendale, Calif.–based lifestyle mall The Americana at Brand, which had charged Kitson with unlawful detainer, or not paying its rent.
Seattle retailer Eddie Bauer Holdings filed for Chapter 11 bankruptcy protection in June.
American retail sales dropped 5.1 percent in June, according to the International Council of Shopping Centers.
The apparel industry scrambled to draw down lines of credit from CIT after learning on June 12 that the New York–based factor was facing a financial crisis. On June 15 the New York Stock Exchange stopped trading shares of CIT while the commercial lender discussed a temporary loan agreement with federal regulators.
Brisbane, Calif.shy;shy;–based retailer Bebe changed the name of its Bebe Sport label to PH8.
The South Bay Pavilion, a 1.1 million-square-foot shopping center in Carson, Calif., sold for $50 million to real estate executive Fred Sands.
Los Angeles retailer Lisa Kline scaled back the square footage of her Robertson Boulevard boutique and closed her stores in Beverly Hills and Malibu, her corporate headquarters on Melrose, and her e-commerce site in a strategy to shore up her business during the tough economy.
More than 12,000 attendees turned out for the July 15–21 run of Mercedes-Benz Fashion Week Swim and SwimShow 2010 in Miami Beach, Fla.
AUGUST
A Los Angeles jury awarded $370 million to former employees of Guess? Inc. co-founder Georges Marciano in a countersuit against the former clothier for intentional affliction of emotional distress.
!iT Jeans formed a partnership with Los Angeles–based premium-denim brand Kasil. The two companies are now housed under one roof at iT!’s Vernon, Calif.–based headquarters.
Forever 21 opened its first Caribbean store in San Juan, Puerto Rico.
Retail sales at U.S. chain stores fell 5 percent in July, according to the International Council of Shopping Centers.
Immediates and accessories were at the top of retailers’ lists at the Aug. 7–11 Los Angeles Fashion Market.
The Federation Internationale de Natation—FINA—determined that polyurethane-basedswimsuits, such as Speedo’s LZR and Tyr’s Tracer suits, provided an unfair advantage in competition. The high-priced suits, which were worn by many record-breaking athletes at the last two Olympic games, were selling well at retailers that cater to competitive swimmers.
San Diego–based Charlotte Russe Holding Inc. was purchased by private equity firm Advent International Corp. for $380 million.
The Consumer Product Safety Commission amended its Consumer Product Safety Improvement Act to include an exemption for fabric and yarn. The CPSIA requires testing of all components of children’s products for lead. The fabric-and-yarn provision had been a point of contention among childrenswear manufacturers, who argued that neither fabric nor yarn are lead-bearing and that the costly testing of them places an undue burden on manufacturers.
Los Angeles–based English Laundry introduced a new collection created in partnership with Stone Temple Pilots frontman Scott Weiland. Weiland for English Laundry bowed at the MAGIC Marketplace in Las Vegas.
SEPTEMBER
The mood—and traffic—was much improved in Las Vegas, where buyers turned out to shop 14 apparel and sourcing trade shows.
Attendance was down but orders were up at the Aug. 17–18 run of contemporary trade show Class in Santa Monica, Calif.
Los Angeles–based fashion designer Anand Jon Alexander was sentenced to 59 years to life in prison for his 2008 conviction of raping and assaulting seven female victims ranging in age from 14 to 21.
American retail sales were down 2 percent in August, according to the International Council of Shopping Centers.
About 1,500 American Apparel employees were laid off from the Los Angeles apparel maker after an investigation by U.S. Immigration and Customs Enforcement revealed discrepancies between the names and Social Security numbers of the employees. American Apparel founder and Chief Executive Officer Dov Charney posted a farewell message on the company’s blog saying he was “deeply saddened” by the layoffs and promised to “fight for immigration reform for the rest of [his] career.”
Gap Inc. introduced a new premium-denim label, 1969 Premium Jeans, moderately priced at $59.50.
A water-main break in Studio City, Calif., flooded retail stores and other businesses and shut down traffic along busy Coldwater Canyon Avenue.
Class@ASR, the new contemporary streetwear division at the Action Sports Retailer Trade Expo, helped keep the mood high and traffic steady during the Sept. 10–12 run of the show. Organized by Jason Bates, Class@ASR is an abridged version of Bates’ Class trade show, which is held biannually in Santa Monica.
Los Angeles designers and retailers joined an international coterie of designers and cities hosting Fashion’s Night Out events on Sept. 10. Spearheaded by Vogue magazine and the Council of Fashion Designers of America, Fashion’s Night Out included parties and shopping events designed to coax consumers back to the stores.
OCTOBER
Designers Johan and Marcella Lindeberg left William Rast after less than a year with the contemporary apparel line. The Lindebergs, who also design the J. Lindeberg label, continue to consult for William Rast.
Business was “better than April” at the Oct. 5–7 run of the Los Angeles Majors Market at the California Market Center.
Thieves committed a rash of burglaries along Los Angeles’ Robertson Boulevard in the early morning of Oct. 6.
Sales at U.S. chain stores were up 0.1 percent in September, according to the International Council of Shopping Centers.
More than 60 runway shows, parties and other events were held around town at Los Angeles Fashion Week, which ran Oct. 8–30.
The second edition of textile trade show GlobalTex, held Oct. 13–15 at the Los Angeles Convention Center, featured better traffic and more European exhibitors than the April show.
The 2-year-old lawsuit between Forever 21 and Newport Beach, Calif.–based Trovata was settled for an undisclosed amount.
Traffic was deemed only adequate, but retailers were buying at the Oct. 16–20 run of Los Angeles Fashion Market.
Belle Grey, the Sherman Oaks, Calif.–based boutique owned by actress Lisa Rinna, closed its Calabasas, Calif., location.
After only one year in operation, the Clean Trucks Program at the ports in Los Angeles and Long Beach are expected to have eliminated 80 percent of diesel-truck pollution two years early. At the Port of Long Beach, more than half of truck-hauled cargo is done by clean trucks. At the Port of Los Angeles, that figure is nearly 60 percent.
NOVEMBER
Actresses and designers Mary-Kate and Ashley Olsen, owners of The Row and Elizabeth and James brands, struck an exclusive deal with JCPenney to launch a new line called Olsenboye.
Sales at national retail chains climbed 2.1 percent in October, according to the International Council of Shopping Centers.
In the wake of an 18 percent drop in same-store sales, Anaheim, Calif.–based retail chain Pacific Sunwear announced plans to localize its merchandising, close stores and offer more footwear.
Black Friday—the Friday after Thanksgiving and the traditional start to the holiday shopping season—drew crowds of shoppers but only average sales. For e-tailers, the news was much rosier, as e-commerce enjoyed a 14 percent uptick over last year.
Tolland, Conn.–based Gerber Technology purchased New York–based PLM software provider Yunique Solutions.
Los Angeles–based luxury T-shirt and apparel maker Splendid opened its first retail store, on Los Angeles’ Robertson Boulevard.
DECEMBER
U.S. chain stores reported a 0.3 percent drop in sales in November, according to the International Council of Shopping Centers.
CIT Group emerged from Chapter 11 bankruptcy protection after only 40 days when the U.S. BankruptcyCourt of the Southern District of New York approved the commercial lender’s pre-packaged plan of reorganization.
Retailer On Sunset closed after five years at Los Angeles’ Sunset Plaza. The store was originally located on Beverly Boulevard, where it had been called On Beverly.
Los Angeles–based contemporary streetwear brand Five Four Clothing opened two retail stores and announced plans to exit the wholesale business.
Billabong International Ltd. acquired e-tailer Swell (www.swell.com) for an undisclosed amount.
The U.S. House of Representatives passed the extension of the Andean Trade Preferences Act, which allows Colombia, Peru and Ecuador to export certain goods, including apparel and footwear, to the United States duty-free.
By September, the nation’s ports had experienced 27 months of year-over-year cargo declines, according to the monthly “Port Tracker” report, published by IHS Global Insight and the National Retail Federation. The report predicted that 2009 would see nearly a 17 percent drop in cargo-container traffic over 2008, with a total volume of 12.7 million containers. At the Port of Los Angeles, cargo-container traffic dropped 15.4 percent during the first 10 months of 2009 while its neighbor port, the Port of Long Beach, saw a 24 percent decline in container traffic.
In memoriam
N.R.1 and RNC manufacturer Robert Bardavid, 71California Mart executive Adele Morse Platt, 87Designer Linda Segal, 56Apparel Ventures founder Marvin Goodman, 76Price Club founder Sol Price, 93Los Angeles manufacturer Julie Blatt, 84Robert Bryson, husband of retailer Lisa Kline, 40Tapout founder Charles “Mask” Lewis, 45Avery Denison and Paxar Corp. exec Bob Schwager, 73J.G. Boswell Co. executive James G. Boswell II, 86Surf Industry Manufacturers Association Chairman Emeritus Dick Baker, 62Superior Bias rep Bruce Williams, 57