This morning’s WWD has a big story about the now-flailing retail sector in Los Angeles–specifically areas like Third Street, the Melrose corridor (home to stores like Marc Jacobs, Maxfield and Alexander McQueen), Robertson, and Montana in Santa Monica.
Specialty boutiques have been shutting down at a more rapid rate lately. And commercial real estate is struggling–places that were supposed to open like Vera Wang and Phi have scrapped their plans due to the economy. While this isn’t exactly shocking news, what’s interesting to us is how much later this seems to be happening in Los Angeles.
We’ve sadly gotten used to coming to work in Nolita and seeing empty storefronts and the clearing out of merchandise. But there seems to be a delayed reaction in California. We’ve even noticed a similar thing happening in terms of friends being laid off.
Considering that the state of California itself is pretty much a financial disaster at the moment, we were trying to think about how this didn’t happen at the same time it did in New York. My working theory is that while the entertainment industry has, like everything else, been affected by the recession. It was not hit as hard, deeply or quickly a, say the financial industry in New York. And Los Angeles is very much a one-industry town, especially when it comes to the moneyed types.
So perhaps the trickle down was slow. And now it’s finally hitting home. We wish it weren’t so, but we can say we feel their pain.
Most Popular Stories
Comments [9]
Popular Stories
The 10 Best YouTube Hair Tutorials
The 10 Best YouTube Makeup Tutorials 
Fashion's Most Stylish Guys Give Mark Zuckerberg an (Almost!) Hoodie-Free Makeover for Facebook's IPO
Style and Substance: 10 Ladies Who Have Proven You Can Have Both
10 Beauty Boards You Should Be Following on Pinterest
California’s unemployment rate is actually higher than New York’s, and there are just as many, or more, people affected by the downturn, but you’ll see it most starkly in places like Riverside or Stockton. The first, and hardest hit sectors of the economy in California were real estate and contruction, which I’m guessing are a smaller slice of the luxury retail market than the financial industry is in Manhattan. So California hasn’t been less affected, but maybe the wealthiest people in California have been less affected than the wealthiest people in New York City.
I don’t agree that the ‘trickle down’ was slow…its more like a snowball that keeps getting bigger as it rolls downhill.
There has been no recovery here [in CA]- things keep getting worse. A huge chunk of layoffs happened at the end of 2008 (just like everywhere else). Few new jobs have been created, and the companies that laid off are not re-hiring. Social services are being thrown out the window.
I think a more plausible argument is that these stores had the backup to hang on longer. Its possible they thought they could out ride the crisis but here in California, the crisis keeps on…
I usually reserve my indulgence into fashion blogs for my brief moment of escapism, but these posts are so depressing. Granted, it’s an eye opener but still, really depressing.
Guest #1 said it all.
LA runs off of more than one industry. While entertainment is a large factor, we also have a huge agriculture, equestrian, non-profit, technology and real estate sectors. California’s budget crisis do contribute to the state of the retail economy, but it goes much deeper than that. All of our industries have been hard hit and many people have moved because of the 10% tax rate, job losses and inability to do what they need. Some businesses have flourished because they’ve been smart in their investments and product strategies (retailers I mean).
The ones that are fairing best, don’t just rely on regional business. They have multiple distribution points, online and offline. They’ve refined their product lines and made sure all their marketing efforts work accomplish more than one goal. There are still bright spots, brands and retailers just have to be more creative in what they’re doing.
@Macala
i don’t think it is happening later. it has been happening all along. it starter with the writers’ strike in 2007 and continued through the financial crisis. wwd was just slow to report. like that ‘cutting edge’ new york times piece this weekend on sites like gilt.com… businesses in l.a. have been suffering for a long time and the for rent signs along 3rd street are enough to break your heart…
On another note, many fashion houses and stores have chosen to stay due the importance of LA/Hollywood scene. Hello award shows! Of course there are department stores, showrooms and the closets of Rachel Zoe but it is also pretigious for a company to have a store on Rodeo Drive. Look at Gianfranco Ferre for example. They closed their New York store (apparently in hopes of finding a new location with a brand new retail concept) but left their Rodeo store.
And another thing – maybe the financial crisis is not as exposed to the public New York (Wall Street) is. You guys have to consider the time difference!
I just visited LA last month and shopped Melrose and EVERY store high end to low end was insanely pushy, it was such a turn off. Now I see, desperation. Actually the one exception was Betsey Johnson, they were friendly in there without driving me crazy.
The recession has hit LA hard since 2008. High rent/high end fashion retailers are the tail end of it. I’m in the architecture/interior design industry and it has been ravaged from the very beginning of the recession. I live in Hollywood and sorry, not everyone in LA is connected to the film industry..it is NOT a one industry town. Marcala is correct, we have major industry here in the form of technology, manufacturing, real estate, design, etc. I don’t know a single person in LA not affected since last year.