Los Angeles Fashion District Struggles to Return to Pre-Pandemic Business – WWD

Inside the New Moon restaurant, a Chinese restaurant in the heart of the Los Angeles Fashion District, the lunch crowd was sparse on a recent afternoon when shop owners and shoppers were in town for Los Angeles Market Week.

Of the 22 tables, only three were occupied. A waiter worked on the floor while the only cook in the kitchen tossed the gnocchi in a pan.

The general manager of the restaurant, Juan Galindo, was preparing small plastic containers with soy sauce and hot peppers during the slow lunch hour. He complained that no more customers were arriving that day. “Business has been bad for a while, but our catering business is making a comeback,” he said. “Many of our customers still work from home.”

The New Moon has long been the go-to for fashion district showrooms to order trays of food for their visiting shoppers or to cross the street for a reasonably priced lunch from a menu known for its tasty salad of chinese chicken.

It is also like the canary in the coal mine. If things are good in the New Moon, they are good in the Los Angeles Fashion District. But like the New Moon, the Los Angeles Fashion District is still limping back to life.

Showroom vacancies remain higher than before the pandemic. Many showroom owners have either gone out of business or moved their businesses into their homes. Others are sharing showrooms to save money.

It doesn’t help the California Market Center, a massive modern concrete structure that first opened in 1963 as the largest exhibition center in the region.

The 13-story complex – so large it had its own zip code – loomed over the area like an ugly giant. At one time, the complex’s three interconnected buildings housed around 1,000 showrooms over an area of ​​1.8 million square feet.

Showrooms were so sought after that some tenants paid key money, or an additional cost, to secure the rental of a showroom. But as e-commerce competed with brick-and-mortar stores, showroom occupancy slowly declined in the years before the pandemic.

In 2017, Brookfield Properties bought a controlling stake in the building and spent $ 170 million to completely renovate each building. One building was reserved for showrooms and the other two were marketed as creative office space.

To give the complex a new look, Brookfield partnered with the Gensler architecture and design firm to develop a cleaner and more elegant complex to attract creative types looking for a modern workplace in downtown Los Angeles. The exterior of the building has been refurbished with energy-efficient floor-to-ceiling windows and beautiful landscaping has graced a renovated front patio, populated with tables, chairs and umbrellas.

Brookfield unveiled the attractive and contemporary redesign of the two creative office buildings earlier this year. Currently, they remain mostly vacant. The third showroom building has been open for some time and tenants are slowly returning.

“The essence of the building was a challenge,” said Sande Zipser, corporate sales manager for the Lindi / Oopera showroom, which has been in the California Market Center for years. “Showrooms are coming to the CMC, but it’s slow. Many people moved out of the building during the renovations and moved to other buildings. “

But two prominent corporate tenants will arrive in the creative office buildings in the months to come. Adidas is expecting the construction of 107,000 square feet of office space for its marketing, design and sales force. Forever 21 will move its headquarters from east of downtown Los Angeles to the complex when its offices are built.

The California Market Center did not formally announce the arrival of Forever 21, but did confirm through an email that Forever 21’s parent company, Simon Properties Authentic Retail Corp., has signed a long-term lease that according to Retail real estate sources should encompass 100,000 square feet.

Forever 21’s current location is located seven miles east of downtown Los Angeles in an old furniture store Macy’s, the fast fashion retailer sold for $ 166 million in 2019, the same year it filed. bankruptcy protection. Since then, it has leased space at the 2.1 million square foot facility.

Forever 21 employees are already working at the California Market Center outside the temporary spaces on the eighth and ninth floors of the showroom building, said Elizabeth Beery, Forever 21’s vice president of purchasing, who was checking the merchandise lined up on the shelves. clothes on the ninth floor. “We are really excited to be moving to downtown Los Angeles and the Fashion District,” she said.

The last three floors of the showroom building are occupied by the Ross Stores purchasing offices.

Corporate tenants should help fill the ground floor spaces of the complex that are primarily reserved for restaurants and shops. Right now, they are mostly empty. Earlier this year, Brookfield announced that Urbanspace, a food hall with 19 restaurants, would arrive on the ground floor. This hasn’t materialized yet. Nor has a fitness center planned for the ground floor been opened.

On the showroom side of the complex, there was a positive movement. At the beginning of the year, the CMC had around 30 showrooms. There are now around 80 showrooms spread over seven floors with the heaviest representation of the 24 children’s clothing showrooms on the fifth floor.

Kristian Rene, owner of Junkie Collection, opened her first showroom on the fourth floor of CMC two years ago, even though the rent was higher than other showroom buildings. The California Market Center offered smaller showrooms like its own at 600 square feet, which helped save money. “The experience of having a showroom has opened up new avenues for me, doing more business and meeting all kinds of people that I feel I would not have met otherwise,” she said during market week June 12-16. (There is no readily available attendance data for the number of shoppers or store owners during market week.)

The Los Angeles Fashion District struggles to bring business back.
Michael Buckner / WWD

Across the street at the New Mart, a 96-year-old brick structure with around 100 showrooms, the vacancy rate hovers around 15 percent compared to a nearly full building before COVID-19 changed that.

Before the pandemic, Designers and Agents, a contemporary brand fair, took place four times a year on the third floor of the building. This was reduced to twice a year, leaving another income gap. To fill the void of designers and agents, the general manager of The New Mart, Tom Keefer, has renovated the third floor. He cut the walls down to bare brick, enhancing the artistic ambiance of the 15,000-square-foot space and better exposing the fashion runway at the back.

For the recent Los Angeles Fashion Market, four nights of swimwear were held. About 20 designers staged runway shows in collaboration with Art Hearts Fashion, whose owner Erik Rosete is known for his Los Angeles Fashion Week events in March and October, as well as runways in New York and Miami. “It was a huge success,” Keefer said. “Frankly, we’re trying to bring more excitement to the downtown fashion community.”

The Los Angeles Fashion District struggles to bring business back.
Michael Buckner / WWD

More excitement would be good news for the high-end boutiques that have sprung up in the area in recent years. Before the pandemic, the Los Angeles Fashion District was gaining popularity as a hip venue. New boutique hotels, such as the Ace Hotel and the Freehand, have opened in renovated historic buildings, attracting a fresh and creative crowd. Apple was renovating a downtrodden 1927 Renaissance Revival theater with painted ceilings for its latest retail venture.

One of the first brands to risk entering the fashion district when retail was still a gamble was APC. The French ready-to-wear brand known for its denim arrived in 2015 and is still around. But things have been difficult. “Before the pandemic, business was pretty good,” said Ayako Woods, a salesman who keeps the front door of the store closed for security reasons. “But business has gone up and down.”

He said the APC stores in the Silver Lake Art District in Los Angeles and West Hollywood are doing much better.

In January 2020, Ganni, the Danish women’s clothing line, joined the club of exclusive shops on South Broadway, a stone’s throw from the Apple Store, which opened in mid-2021 after a three-year renovation.

Business is just starting to grow as skyscrapers fill with residents. “We knew getting in would be slow,” said Adrian Manzo, the store supervisor, who said the store was closed for six months during the height of the pandemic.

A few doors down, British designer Paul Smith opened a 1,200-square-foot store in July 2020. It too had to close for six months. Sales started returning about six months ago with more lawyers and office tenants returning to their workspaces.

“Before the pandemic, you really saw the neighborhood take off,” said Luis Prado, store manager Paul Smith. “But the pandemic has hit this neighborhood harder than others. We hope he comes back. “