Los Angeles-area retail sales are projected to grow less this year than last, though boutique stores seemed to fare better than larger retailers in the first half of 2000. According to the Los Angeles Economic Development Corp., Los Angeles-area retail sales in 2000 are projected to grow 6.5 percent from their 1999 level, and another 5.1 percent in 2001. In 1999, sales jumped by 9.1 percent over the previous year. Besides a general cooling of the economy, the slowdown is blamed on heavy competition between mid-range department stores like Macy’s and Robinsons-May. These stores, experts say, are not luring as many shoppers because they are carrying similar goods. But distinctive boutique stores appear to be thriving. “I think small business is hot right now,” said retail consultant Bill Pearson with Retail Analysis and Planning in Pasadena. “That came about as chain stores began to report flat sales.” Pearson has 11 Los Angeles clients, including Dolce & Gabbana spin-off D & G; and the 14-store Diane’s Swimwear chain; all but one of his clients are reporting annual sales growth rates in the mid-teens. Mall managers echo Pearson’s sentiments. “Many of the fashion stores are showing double-digit increases,” said Cindy Chong, general manager of Glendale Galleria. “We are doing tremendous sales.” The Galleria reported that year-to-date sales through June at its specialty stores are up 10 percent over the like period of last year, with apparel leading the way. The mall is projecting its specialty-store sales per square foot this year will top $500, up from $465 per square foot last year. The strong sales, Chong said, are mostly in the smaller lifestyle stores, while the larger anchors are struggling. The smaller-store trend is also evident on Melrose Avenue, which keeps expanding with boutique stores springing up west of Crescent Heights Boulevard. “I think the sameness of big stores and the emphasis on price and sheer tonnage of inventory is boring the customer,” Pearson said. Jack Kyser of the LAEDC calls the department stores “homogenized,” adding: “There is a huge copycat factor.” Al Frank, partner in charge of consumer business services at Deloitte & Touche, sees the same trend, and says that smaller stores are benefiting from being located in exciting areas like Old Pasadena and Melrose Avenue, which are creating an “experience” for the shopper. Frank points to Hot Topic Inc. as a smaller mall store that is hitting the right formula, while traditional retailers like Sears Roebuck & Co., JC Penney and Macy’s are trying to reinvent themselves. “They are getting squeezed; they need to re-create in shoppers’ minds a reason to come in,” said Frank.
