retail closures show downtown’s finicky market
Easy come, easy go.
In Downtown’s still-maturing market, the cards are always stacked against the success of new businesses, and two recent retail closures prove some local neighborhoods cannot yet provide the demand to fill niche supply.
Victor Witold’s fashion boutique 43 Styles inside the SB Lofts went dark over the weekend, citing weak sales over his two-month run.
“I seriously doubt if the Downtown community is ready to support all small businesses starting in the area,” states Witold after considering his experience as a soft goods retailer.
Instead of sitting vacant, the space will default to a flexible multi-purpose studio; a resilient use in a risky commercial market, but one all too common in Downtown’s Historic Core.
Joy of Life, a gourmet chocolatier which opened in the Toy Factory Lofts back in January, has learned that life isn’t always jovial.
Industrial District resident and angelenic contributer Noah Stone reports that the dessert boutique chain closed its doors last last month. The news comes as no surprise in an area of Downtown that still lacks basic neighborhood-serving retail.
At the end of the day, as much as we tout Downtown’s arrival, sensibility and market research are essential for launching any venture, anywhere.
-new clothing boutique finds home in sb lofts
-chocolate shops promotes ‘joy of life’ in industrial district
31 comments
You open up a new business any where in the city and there is a high probability that it will fail. That is the fact of life of small businesses. Downtown is also still evolving and there are still alot of pockets that are empty of life your residences, the so-called “critical mass” is not yet there.
But it is getting there and over time, especially after this bad economy picks up”, more and more of these small businesses will survive.
The problem for retail downtown is that there isn’t a critical mass of stores in one area. most of the people i know who live here shop in areas west and north of here. People come from other areas to the fashion district to get a good deal, but that’s a different market (though I could see that being a transition point to higher end retail). LA is a destination-based city, and downtown is increasingly a destination for a lot of things (culture, sports, restaurants & bars), but not for retail. Until a neighborhood gets that critical mass of 10-20 stores in one area, it’s going to be difficult.
I loved the chocolate guys and I miss them already. They made cappuccinos and sat and talked. I wish it had worked out for them. The problem is finding out exactly what works when you’re starting a new street. It may take a few turnovers. You have to think what will appeal to the residents of the Arts District, what we need and what will keep us from venturing out of our neighborhood. As good as that chocolate was (and it was good), chocolate is too niche. Maybe coffee. Maybe a Dean & Deluca-style gourmet take-out. If I could walk downstairs and buy everything I need to make a really wonderful dinner, I wouldn’t leave the district. There are almost 200 occupied lofts on Industrial Street alone. The right retail will thrive here.
I think any new business venture needs to have enough capital to establish a sustainable revenue stream via a client base before closing up shop and calling Downtown not ready to sustain retail.
There’s more retail business in the Fashion District than on Rodeo Drive. People Downtown know the true price of garments because they see the industry up close and personal everyday. It’s very hard to ever pay full price for a piece of clothing on the Westside or in the Valley once you have seen it fall off a rack crossing Los Angeles street.
Two months is not a good enough measure of the business climate Downtown unless your business plan hinged on an element of instant success.
And, if that is the case, the expectation that your receipts will instantly match your overhead is unrealistic. A do-it-yourself business book will tell you a minimum of 18 months of operating expenses (including your own salary) before hanging your shingle out with a new venture and that’s in a non-recession economy.
It’s odd how very schlocky, junky, dreary stores on streets like Broadway can manage to hang on for years on end, while these 2 stores didn’t survive beyond a few months.
Something is wrong with that picture. And it’s another reason why the default option in downtown for several decades often has pointed to “junk” and “crummy.”
To most Downtowners with disposable cash for Westside prices, clothes are disposable not fashionable. You want to make it a matter of taste, sobeit but for the prices of clothes on Los Angeles Street and Broadway, there are plenty of people Downtown who sacrifice fashion for being able to toss a pair of shoes in the trash and replace them rather than expend the time it would suck away to repair or even clean them. For $225 you can get a suit on Los Angeles Street tailored to fit in an afternoon and that’s spending a lot on that street. Total time under and hour so it’s quicker and easier than driving to the Westside let alone that you can buy three suits for the price of one name brand comparable on clearance markdown in a store where the salespeople treat you like crap, not gold. People Downtown aren’t dumb and few are into labels. Any business failure in two months was poorly planned with respect to market research and undercapitalized to adapt. It also helps if you are open when people want to come in and check you out.
I agree with the Donald. If a business closes after 2 months you don’t blame it on the customers, but on the business plan. It took my business 3 years to become profitable. You gotta hang in there.
I love the fact that the one vendor blames us Downtowners! I never heard of 43 Styles and I do kinda get out and about. Did they advertise? Not only should a new business do market research, but they need to market…period. I also agree with Donny T., before you open, you’ve gotta have the capital, and “they” say it’s generally 2 years before you turn a profit. If I had the capital, I’d open a business Downtown, with a large budget for advertising & marketing.
I love the fact that the one vendor blames us Downtowners!
This is a trend I’ve been noticing when businesses or flea markets don’t succeed in Downtown. The residents (potential customers) are blamed. There’s been many comments about Downtowners not supporting local business or voting with their pocket books. Since when is business a charity? If you want to guilt people into giving you money, make a non-profit and ask for donations. If you want to run a business in the market, study the market and come up with a business model that works. If it fails (and as has been mentioned, 2 months is no amount of time to judge whether is business is a failure or success) it’s because it was the wrong business in the wrong market, not because locals didn’t come up and donate their money for products or services they don’t desire.
^ I agree with all the replies above.
It takes money to make money.
Also the “product-item” for sale must fill a need.
And finally customer service, because no matter how good or great the “product-item” your selling is, if the customer service sucks or is less than desired, you won’t be getting my money.
Like I always say…Bad cop, No donut.
same applies to businesses …Bad customer service, None of my money.
So to be blunt and direct, I have no sympathy or compassion for these shops closing.
Think, Plan and Execute.
Supply and Demand..baby!
I actually went to 43 styles. How did I know they existed? Because Angelenic actually did a story on them. I didn’t buy anything, but I would have if I found a piece of clothing that I liked (for my wife that is).
Anyhow, I make the effort to walk around because I want to see whats happening downtown. If I actually lived downtown, I would probably scour the internet and walk the streets looking to see how my hood was growing up before my eyes on a weekly basis.
43 styles closed after just 2 months, so I think they didn’t give their business enough time, and that is their bad. On the other hand, I would expect downtowners to walk up and down their hood looking for changes, getting exercise, or just livening up the sidewalk and meeting neighbors. I know I know. It doesn’t help that these businesses are spread out, or that downtown has huge dead zones to walk across, but still, many of you are urban pioneers right?! I would expect most downtowners to pop into most new stores just to see what’s going on and to welcome the new owners to the community. You don’t have to buy anything to show interest.
Once downtown arrives and ceases to be a tight-nit commuinty, then by all means, only go to the business that advertises the best and offers a product you KNOW you will like. Until then, I still think that the surrounding community can do more to engage new businesses
Just my 2 cents.
Take a look at the AMAZING sneaker store Blendz on 4th st. They do it right. They bring an interesting product that can’t be found anywhere else in town. The unique quality of merchandise makes people travel to downtown to shop here. These are the kinds of businesses that will succeed here. LA already has great shopping streets, world class in fact, like Robertson, Rodeo, Melrose, Montana, 3rd St (both in LA and Santa Monica), so to try and compete with these other streets is crazy. DTLA retail needs to be worth the drive, worth the walk, worth the Metro trip.
^ 100% agree, Blendz has done it right and I’m a repeat customer.
My wife and I would like to open something downtown but know it would be a waste to build out acquire inventory then shut down less then 2 years, 2 months…that sounds like of a hobby to me more then a serious business plan.
DT will get there and along the way we’ll all see some surprise local companies make it.
First of all, let’s clarify what happened to Joy of Life: They got a distribution deal with Costco and no longer needed to keep their overly expensive retail space on Industrial Street. They realized that they could hang out at home and sell things online and watch the Costco sales happen on their own and enjoy a higher quality of life. That being said, their opening a retail chocolate place down here WAS probably a bad idea.. but one born of optimism, and you cant blame them for that.
Now, as far as the other closures – it’s obvious (to me) what is happening around here. I love my gallery and Im happy that I opened it a few months ago, but I did so coming from NY with little to no knowledge on what downtown had or needed. In hindsight, if I were to have scouted out more in the neighborhood, I would have opened something else and waited on the gallery. The problem, as one commenter pointed out above, is that for many people (myself included?) these downtown businesses are ‘hobby’s’ or based on personal interest, and not any actual business sense.
Downtown needs a good organic dry cleaner. A good mail/shipping location. More health and organic food sources. PIZZA. Any late night eateries that aren’t fast food. Higher end or even mediocre furniture stores – crate and barrel, modernica, restoration hardware etc. How about a car wash? I mean.. the list is farily large of gaping holes in the What Average Joe Needs list. Yet were getting 2 more art galleries on this street? You have your choice of DOG CLOTHING sellers in the area? You know? Yes.. opening a dry-cleaners is boring and not very glamorous. A mail box store.. youre not going to get in the news doing that. But you’ll make MONEY and supply something to the locals that they NEED.
Its very hard to justify opening or maintaining a vanity business in downtown now that the prices are so high. The rent here in the Toy Lofts is VERY expensive to retailers and the walk-by is almost non-existent. Unless you are a destination location or one that can somehow survive on one night a months business, this just isnt the place for you. I feel that if Joy Of Life were to have opened its doors on Santa Monica Promenade or even Melrose, for godsake, they would probably be doing very well. When we moved in (along with some of our other neighbors) we were promised tons of foot traffic due to the opening of the still-fictitious Church and State restaurant, as well as the HOAX of a Yoga Studio etc. We were sold on all of the up and coming stores and blah blah blah and are all now seeing that we were duped and are scrambling to make sense of what is happening in the artists district.
It’s not a lost cause, dont get me wrong. I just think that this hood put the cart before the horse. In order for boutique-style businesses to exist in a place like this, the ground work has to be laid down first. Regular people who NEED to be in the area, who arent afraid of walking around.. who do business and spend money etc. I doubt if anyone was driving in from venice to buy a delicious truffle, you know? Anyway.. end rant. We miss Victor and Martin and wish them well with their business. We embrace anyone with the ego-less balls to open something that people NEED down here. Dont be surprised if you see an “Untitled (FedEx/UPS)” one day…
Well said, Matt.
Pizza: Pit Fire, Rocket
Organic Dry Cleaner: Wasn’t the one in the clothing store in the San Fernando building organic? Even if it wasn’t, it is still closed. Buy a steamer in the garment district.
Furniture: Loft Appeal, the outlet across the river on Fourth
Mail/shipping: FedEx Kinkos, post offices, UPS Stores and others all over the place
24/7 food that is not fast food: Pacific Dining Car, The Standard, The Pantry
^ And there’s car washes at 6th/Main as well as Olympic/Figueroa.
Car wash — forgot that one — Little Tokyo off First east of Alameda
“The rent here in the Toy Lofts is VERY expensive to retailers and the walk-by is almost non-existent.”
That is my biggest pet peeve. I read a story about a very wealthy korean who has bought up serious space downtown. His strategy is to charge very low rent to tenants that he desires. Once the building is full and foot traffic/etc. is high, he brings the building to within market rates after several years. That is a no brainer and simply brilliant.
Why doesn’t the rest of downtown do that? Encourage tons of people to locate downtown because of the prices, and then have them stay even when it is very expensive because of the success of the neighborhood. Isn’t this a solid plan for a neighborhood that has struggled over the decades?
“Downtown needs…
1) a good organic dry cleaner – the one that was in the san fernando died and almost no one noticed.
2) A good mail/shipping location. – 6th & los angeles in the pe lofts.
3) More health and organic food sources. – nijiya organic grocery store is in little tokyo, there’s a kosher grocery store in the fashion district, and farmer’s markets in chinatown, city hall, central library, bank of america plaza and 7th & fig on weekdays, not to mention the flea market on sundays.
4) Any late night eateries that aren’t fast food. – koraku is open until 3am, 4am on fri/sat; daikokuya open until 1am; pacific dining car, and the pantry
5) Higher end or even mediocre furniture stores – Loft Appeal has two locations, Cleveland Industrial is at Barker Block; Sweet Smiling Home is on Palmetto, but unfortunately the Dock Downtown on 4th closed.
6) How about a car wash? – the car wash at olympic and figueroa is the one that most cabs and cops use and there’s a steam clean car wash with detailing at the parking garage on 6th & main
W hat’s all this about “community support”? These are businesses, not charities. You don’t make it, it’s your fault, not the customers. I, for one, will not miss this rag store.
Fred Camino is right on.
Modernica’s design shop, business office and factory are all Downtown.
What these store fronts looked like less than two years ago:
http://picasaweb.google.com/benjamin.pezzillo/NewLosAngelesNocturnalWork2006/photo#5013712476936264594
Wow.. Im.. well.. let’s see. Im happy that all of you listed so many places to fill the gaps I mentioned.. but Im also surprised at the lists you chose. I mean, to put Pacific Dining Car and The Pantry as normal food options is almost silly.
A burger at Pacific is $21, really. The fact that the pantry is even allowed to publicly operate with the filth level that it maintains is possibly more miraculous than its ever-opened doors. Think Fred 62, Swingers, Cafe 101, even Canter’s. Places where one can go and sit and eat and not have to take out a loan or fight for a table with a homeless person. Normal options. I also like how none of you mentioned iHop or Subway. nice. I know youll leave 20 anti-hipster comments now on Fred 62 etc… and I dont blame you, but you see what Im saying, right?
Furniture. Warehouses aren’t retail stores. Im talking NORMAL retail furniture. A store where one can get a lamp that works. Something IN a box, perhaps. A rug. 4 chairs that aren’t floor models. Again, look at my suggestions. I know CHAIN is a 4-letter-word to most of you.. but there’s something to be said about purchasing items with no Scratches or Dents.
I wont even continue battling the rest of your lists. Some of them were helpful, and I thank you.. but I think you missed the point.
Downtown is a strange place. It seems that once upon a time, much like in Williamsburg, there were crafty people moving here. People who liked to shop in warehouses.. in fixture stores etc. People moved here who enjoyed looking for and finding that crazy unmarked building where they could get some imported bean for a dollar that costs $24 at Whole Foods. And some of that is still around. Maybe a lot, shit, I dont know. But what I do know is that almost all of my neighbors in the building are not of that ilk. Nor are the people who come down here daily for loft showings with their realtors. People with realtors do not want to eat out of the back door of the fish market, even if that IS where you get the freshest stuff for pennies on the dollar. They might say they do for street cred, but then they drive in on the 10 and eat at Grande Lux or something. I drive all the way down 3rd to Larhcmont all the time for pizza. Delish.
If anyone cares to CLEAN UP this area, make it more livable, make a buck, run a successful business, they are going to have to give up the cooler/dirtier/secretier(I made that up)/holier than thou attitude and realize that ONE Trader Joe’s is more desirable to most than 5 strange hidden places with bad parking who might or might not have what you need THAT DAY. You know? Places like The Edison and Pete’s are thriving because they cater to the crowd Im talking about.. but IN downtown. These are smart businesses. Comme Des Garcons Guerilla Store.. genius. That specialty Lemonade place in the underground mall – no so much.
You guys hate on my comments, but I hope you see that they’re coming from a place of what I think is realism and optimism. I lived in Brooklyn too. It was cool. It was nice to buzz the buzzer at the back gate of the bakery at 3am and get hot bagels – but when they announced the Trader Joe’s opening on Court Street, there was a PARADE.
A PARADE.
http://www.brooklyneagle.com/categories/category.php?category_id=27&id=14029
Matt:
This is what the storefront for 43 Styles looked like less than two years ago:
http://tinyurl.com/5ehgd3
Matt, when you drive to Larchmont, are you referring to Village Pizzeria?
Lamonica’s on Sixth is better than Village on Larchmont but it closes before dinner time. Now, Marino’s Bottega on Larchmont is another story.
Still, while Pit Fire is not as good as NYC’s Grimaldi’s, Lombardi’s or John’s on Bleeker — it’s close and their pepperoni is the best in Los Angeles as far as I am concerned. You can also have elbow room , something none of the good spots in NYC offer.
Purgatory Pizza is delivery only but I have to say that’s some of the best I’ve had. eatpurgatorypizza.com
Matt, I think you took my comment the wrong way. I know that people moving to places like the Biscuit Co. Lofts and the Toy Factory Lofts are a lot different than those moving to, say, the Old Bank District. It’s just a different vibe, different crowd.
Our lists weren’t meant to be battled. You said there’s no car wash, and I don’t know how long you’ve been here, so I offered you some suggestions for places to get your car washed.
You asked for 24-hour restaurants, and a few people replied with some of the 24-hour restaurants in Downtown. I don’t know what else you want…
I’m also not going to go anti-hipster on Fred 62. I love that place. I don’t think I qualify as a hipster, either. I don’t even know what that really means, anyway.
It sounds like what you really want is an established neighborhood. Downtown still has a way to go for that, and the people that have been involved in the neighborhood for years can really appreciate the progress that’s been made since the ’90s.
Those 24-hour restaurants and Trader Joe’s and big furniture chains will come soon, but I hope you didn’t buy into Downtown on the assumption that all that was already here.
I agree with you Matt that the Toy Factory is not a place that can be expected to have foot traffic, and I am truly sorry if you were misled into believing that it would be.
But, like you say, it is our job to drive traffic to us. In 2003 the foot traffic on Main Street was heavy on the homeless and poor, and few others. Today it is totally diverse, busy, and growing. It takes time.
The reason Gallery Row happened is exactly as you described. The landlords gave deals at first to get it started, and it grew. Now rents are rising and more people are willing to give it a shot. Most will likely fail, but eventually a critical mass will evolve.
Look at the storefronts that sit empty year after year. They are almost always being offered at rents that are too high, or get rented to a business that closes within months, and then remain empty again. It’s sad, but I do think it is changing. It takes 20 years, not 5.
Thanks everyone for all the comments. I appreciate the lists of new places and everything, I really do.
In response to Burt:
Someone should write an article on this site about the misleading promises that the developers in these areas pitch. I mean, Im not stupid and knew what I was getting in to when I took this place. I knew most of the promises and plans were a way off.. but what Im really pissed about is the strange complacency that seems to have taken over around here. This building in particular. I think we’ve all said ’20 years, not 5′ so often, that were just waiting 19 years before doing anything. Wait – no – that’s not fair to say. THIS BUILDING seems to be waiting 20 years.
Look at the list of amenities that most of the downtown lofts mention. Its pretty silly when you compare them with reality. Parking? Pools? Retail? etc. I especially love the amazing rendering of the POOL that is supposedly outside my window right now. Sure looks a lot like a pile of DIRT to me.
We lost ANOTHER tenant this week. Or, we will shortly. Maybe thats supposed to be a secret or something. And to another building very close (guess!) who was SMART and made them a very generous offer in order to get them to move. I like to see when buildings and developers are active and pushing.. and I think much of the frustration that you might read in to my posts above come from the lack of that down here.
Im shocked when there is a blank spot in my building but no drycleaner. When there is a restaurant that has been sitting vacant since March. Im confused and angry about this. I work my ASS off all day to try and make money and better myself and the area around me, and sometimes I feel like Im in it alone. I never felt that in NY. It was the opposite. It was that everyone else was kicking ass and I had to work even HARDER to keep up.. and the end result was that the city is what it is.
There are lots of you who feel the same way I do, I know – you comment here as well. The problem is that (as far as I know) none of us are the ones making the big decisions. We dont own the buildings. I suppose I should just buck up to the fact that the guys who own these places and this land will always be out of touch with the people that live here. In fact, ironically, thats one of the reasons why I chose the Toy Lofts. The 2 developers of the building live IN it, which seemed awesome to me at first. At FIRST.
Anyway.. Ill save that rant for another time. Im off topic enough as it is.
Thanks again for the tips.. Ill try to check them out some time. In the mean time, see you all on Thursday night.