California Apparel News

Boutique retail streets suffered horribly during the Great Recession, and two years into a weak recovery, boutique districts across California have had mixed records in returning to their former economic health.

At the height of the recession, more than 20 vacancies pockmarked Santa Monica, Calif.’s Montana Avenue, a prominent boutique district known for women’s fashions. As of press time, there were seven vacancies on the street as it attracts new businesses, including Ruti, which opened at 1406 Montana Ave. on May 30. Even many of the area’s veteran boutique owners are giving Montana Avenue a vote of confidence. Fashion boutiques Savannah, Weathervane for Women and Jill Roberts are all in the process of remodeling and extending their stays on the street.

It’s a hard-fought story of business survival that currently has a pleasant ending, said Jane Walker, who has worked at Three Bags Full at 716 Montana Ave. since 1990. She also serves as co-chair of Montana Avenue Merchants Association.

“I didn’t think things were going to get better for a long time,” she said. “Things turned around quicker than I thought they would. Things are still tough. I am cautiously optimistic.”

The reasons for Montana’s comeback range from macroeconomic to microeconomic causes. Business improved for Montana boutiques because people started shopping again after the tepid economic recovery just like they did across the country, Walker said. Also, rents around the nation declined and Montana landlords were flexible, according to Chuck Dembo, partner in Beverly Hills, Calif.–based commercial real estate company Dembo Realty, which handles some listings on the street.

Before the recession, Montana rents peaked at $10 per square foot. Now commercial space costs $6 per square foot on the street.

The lower prices attracted new businesses to Montana. Boutique French Lessons, at 1327 Montana Ave., moved to the street in 2009 because of Montana’s fashion reputation as a center of womenswear and because of the lower real estate prices, said Gilda Tunney, the boutique’s owner, who also runs five French Lessons boutiques in the Boston area and one in Montecito, Calif.

Success attracts more success. Stacy Johnson chose to open her boutique for her Stacia knitwear brand at 808 11th St., just off of Montana Avenue, in July 2011. A Montana shopper herself, Johnson had wanted to open a shop on the street for a while. A lower rent sealed her decision. But some risk was taken out of her decision because other shops, such as French Lessons, had moved onto the street. “If I had looked earlier, it might have been a different story,” she said, referring to the street’s formerly high vacancy.

An established retail street in Santa Monica should have an easier time in making a comeback than neighborhoods in other parts of Los Angeles County, said Dr. Jenny Schuetz, a professor with the Sol Price School of Public Policy at the University of Southern California.

A lot of Santa Monica boutiques focus on luxury retail, and the segment did not suffer as much as mid-tier retail during the recession.  Santa Monica’s design also serves boutique retail, Schuetz said. “It’s a pretty walkable area for L.A.,” she said. Casual shoppers can walk off of the street and buy something on impulse while on their way to popular Montana restaurants, such as Kreation Kafé, Father’s Office and Blue Plate.

Other boutique districts, such as the Melrose Heights area of Los Angeles, located at the intersection of Melrose and Fairfax avenues, have not enjoyed a speedy comeback. Currently, there are 10 vacant storefronts in a four-block area stretching from the corner of Fairfax and Melrose avenues to the corner of Melrose and Crescent Heights.

One reason may be that the thoroughfare is dominated by car travel and people have to make more of an effort to shop there, Schuetz said.

Areas along the Metro Expo Line light rail, currently operating from downtown Los Angeles to Culver City, could also attract new retail, Schuetz said. Construction at the line’s last stop, in Santa Monica, is scheduled to be completed in 2015.

Available parking, however, is a perennial issue on Montana Avenue. Over different times during the past few decades, store owners have requested a parking structure be constructed. Recently, on-street parking meters were improved to allow payment from mobile phone, credit card and cash, said Erika Cavicante, a senior development analyst with the city of Santa Monica, which widened options for payment.

Still, the area’s concentration of well-off, fashion-conscious residents has helped Montana’s comeback. An average house north of Montana costs $3.5 million, Dembo said. Residents are community-minded, they seek to support local business, and many stick close to home because Santa Monica’s gridlocked traffic is notorious, said Jill Roberts, founder of the Jill Roberts boutique chain. Her boutique at 920 Montana Ave. has been selling fashions on the street since 1995 and is one of four stores in her chain in Los Angeles County.

Montana’s women tend to keep their fashions casual. Roberts’ typical customer is a youngish mom seeking stylish, fashionable clothes that can be worn every day. Montana’s customer mix has been gaining diversity. Last year streetwear shoe shop Kicks moved onto the street at 1603 Montana Ave. Boutiques Bel Mondo and Sean also sell menswear on Montana Avenue.

Montana Avenue will continue to beckon boutique owners because wealthy tech companies such as Google Inc. and BeachMint Inc. set up offices in Santa Monica and are expanding their real estate in the area.

“There will be more bodies to sell to,” said Stella Shirman, owner of the Estell boutique, which has been doing business at 908 Montana Ave. since 2010.