California Apparel News

Even if the wider U.S. economy seems slow, one market segment continues to make retailers’ cash registers ring—tourism.

For Fraser Ross, founder of Los Angeles–headquartered boutique chain Kitson, tourists make up 50 percent of his retail traffic during summers, and their business is crucial. “Los Angeles has two Christmases—summer and December,” Ross said. “The summer is as good as December.”

The retail industry is making additional space for the tourist dollar. Many major retailers, including Macy’s Inc., employ directors of tourism to attract overseas tourists to shop at their stateside stores. Macy’s also maintains visitors’ centers at 10of its locations. These centers do everything from producing fashion shows for tourists to helping with shipping overseas.

Costa Mesa, Calif.–based luxury retail center South Coast Plaza and Rodeo Drive in Beverly Hills have long been popular stops with tourists from all over the globe. But tourism is no longer a game just for the luxury set.

Located a short drive outside of downtown Los Angeles, Citadel Outlets, a Craig Realty Group mall offering brand merchandise at off-price and discount prices, has employed a full-time tourism-marketing director since2010. Kristina Carlson makes frequent overseas trips to promote Citadel Outlets with tour operators in China, Australia, Brazil and almost every other point on the globe with a well-to-do class looking for a pleasure trip to the United States.

On top of the typical 30 percent to 70 percent discounts offered at outlet stores for Levi’s, Gap and Coach, Citadel Outlets retailers will offer tourists coupons for an additional 10percent to 20 percent off if they visit the shopping center. Citadel Outlets makes it as easy to visit the center as it is to hop on a bus. Since 2011, Citadel Outlets has run a shuttle from hotels in Anaheim, Calif., to the Citadel. The shuttle runs every day,four times a day. Earlier this year, the mall started a shuttle to hotels in Pasadena and other parts of the San Gabriel Valley area, mostly picking up Mandarin-speaking shoppers. Next year it will open shuttle service to hotels in the Hollywood area, said Traci Markel, director of marketing at the Citadel Outlets.

Occupancy for hotel rooms steadily rose all over the state of California in the first fiscal quarter for 2012. Compared with the same time last year, occupancy for hotel rooms increased 3.9 percent in Orange County, 3.2 percent in Los Angeles, 4.5 percent in San Diego and 2.6 percent in San Francisco.

Tourism from Asian countries has been increasing in 2012, and the first point of entry to the United States for tourists from Asia typically is California, where many come to shop, said Adam Sacks,president of Tourism Economics,a tourism-business company based in Wayne, Penn.

Japanese tourism to the United States has increased 9.3 percent fort he first quarter of this year. Taiwanese tourism has increased 10percent, Korean tourism is up 12percent, and Hong Kong is up 44percent, Sacks said.

Despite persistently high U.S. unemployment and a volatile stockmarket, tourism-business experts don’t expect domestic tourism to decline much. It’s the same story for European tourism despite the economic pressures among European Union countries. As long as the solidly performing luxury goods market does well, tourism will continue to do well, experts say. Wealthy consumers patronize both markets. “They’re mirror images,”Sacks said.

Similar to the luxury-goods market,retail plays a significant role in tourism. According to the International Shopping Traveler Study, a survey commissioned by Taubman Centers and Shop America Alliance LLC in 2009, international travelers contribute $38.6 billion tot he U.S. economy annually, and 30 percent of overseas travelers said shopping was an important reason for choosing their American destination. The survey is estimated to be the latest on tourists’ retail preferences.

Tourists are typically looking for apparel, footwear and electronics during their U.S. shopping trips. The most popular brands including Nike, Levi’s, Gap, Polo Ralph Lauren,Tommy Hilfiger and Abercrombie & Fitch. Computers and other devices from Apple are also popular.

According to the survey, 64 percent of those tourists said getting a “good value for price paid” was the most important thing about shopping in America. Access to outlet malls also is important. In American boutiques and malls, Asian and South American tourists do not pay the stiff tariffs on foreign goods that are levied in their homelands. European tourists do not have to pay for value-added taxes imposed by the European Union on goods.

Compared with shopping in their homelands,overseas tourists find goods 30 percent to 60 percent cheaper in America, estimated Rosemary McCormick, president of the Shop Alliance America organization.

For California retailers located in areas popular with tourists, summer is no time to take it easy, Kitson’s Ross said.

Those who are affluent enough to travel have extra money to spend on apparel for their family. If they decamp in a certain locale for along period of time, they could buy an entire summer wardrobe, Ross said, judging from his three-year experience of running a Kitson location in Malibu, Calif.

Ross opened a new vista in tourist retail recently. On April 2, he opened a 1,000-square foot Kitson boutique at the Tom Bradley International Terminal at Los Angeles International Airport.

For the first month, the airport Kitson sold traditional airport fare—toys, gifts, books and suntan lotion. Now it is carrying sweaters and leggings along with $650 sunglasses and $400 sweaters.

One reason why tourists are spending increasing amounts of money at airport stores is that they have more time to kill at airports. Because of security measures, many travelers arrive at airports more than a couple of hours before flights depart.

Tourist season also puts California beach towns in the black. Muse is a 900-square-footwomenswear boutique in Laguna Beach, Calif. From early June to Labor Day, its business shoots up three times compared with the rest of the year. Muse owner Alan Hall hires an extra saleswoman during the summers, buys more accessories and stuff people can easily pack, and often spends extra time chasing inventory down because it sells so quickly.

Hall also warns retailers to not to get too comfortable with the good times. “It’s like a huge party during the season. Money is rolling in; you don’t know what to do with it all,”he said

“The party isn’t going to last forever. When the show is over the show is over; then it goes back to a slower pace,” Hall said.