MELROSE—Melrose Adept at Reinventing Street Retail

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Economic cycles come and go, and so do the retailers along Melrose Avenue. Few shopping districts are as volatile as the mile-long stretch of Melrose between Fairfax and La Brea avenues in Hollywood. When economic times are rockin’, Melrose retailers are rolling in it, and when times turn bad, well, many of them disappear.

Currently, times are good, and as a result, the retail vacancy rate on Melrose is practically zilch, even though monthly rents are back up to $5 a square foot. (That’s comparable to Santa Monica’s Montana Avenue, but still about half the rate on the Third Street Promenade.)

“Melrose is like a recipe. It has had its ebbs and flows,” observed Cheryl Cohen. “It is really survival of the fittest.”

And Cohen has survived, so far, operating her used-clothing store, Wastleland, on Melrose since it opened in 1993.

Factors contributing to the high fatality rate of retailers on Melrose include the trendy nature of their merchandise, and their tendency to carry the same types of products.

At the moment, many Melrose shops are selling the same kinds of “ravewear.” Especially prevalent is women’s apparel, ranging from slinky spaghetti-strap dresses to faux snakeskin pants and feather boas. It’s basic nightclub garb that appeals to the Generation Y crowd.

“It’s really hard to compete,” acknowledged Lisa Sohn, who six months ago opened up a store called Flirt, which sells young contemporary clothing. “I’ve been working on Melrose for nine years. You have to know the clientele. But there is always traffic here because you always have the tourists.”

Indeed, Melrose has long been a tourist destination.

Japanese tourists were prevalent in the late 1980s and known for dropping $3,000 to $5,000 in a single shopping trip. Their numbers dwindled during the 1990s, as that country weathered a stiff economic recession, but they’re trickling back now, eager to buy a piece of American fashion.

“There’s still a tremendous tourist base on the avenue,” said Chris Mara, a real estate broker with Hilton & Hyland Real Estate. Yet locals still make up the bulk of business.

Famous actors also are frequently sighted on the street. Last month, Melanie Griffith was at Wasteland looking for clothes for her son. Jamie Lee Curtis was in to find Doc Marten shoes for her son. And Britney Spears stopped by a couple of weeks ago with her boyfriend as they checked out the clothing lineup, Cohen said.

“Melrose is popular because there is a certain synergy there,” explained Matthew May, executive vice president at Sachse Commercial, a real estate brokerage firm. “There’s no other area that has that in Los Angeles, except Venice.”

While it’s true that individuality and quirkiness remain characteristics of Melrose Avenue, a few chain stores have managed to survive in the land of independent retailers.

Jamba Juice, Starbucks, The Coffee Bean, Sketchers USA and Urban Outfitters occupy a section of the avenue that could be called the franchise fringe. They are doing well despite the fact that Benetton and The Gap came and went two years ago.

“The Gap was very vanilla,” said Cohen, the used-clothing store owner.

Urban Outfitters, a Philadelphia-based chain known for its constantly changing fashions that appeal to young people, took over The Gap lease and is doing well. But no one expects Melrose to ever look like the Third Street Promenade or Century City Shopping Center.

“It is what it is, no matter what is happening in the city, Hollywood or the malls,” said real estate broker Mara. “It is so unique.”

And that remains the primary pull of Melrose for youthful consumers it’s seen as a hip place to hang out and people-watch while indulging their sense of coolness at small, independent stores that can’t be found at any local shopping malls.

Forget retailers like Banana Republic and Ann Taylor. Here retailers come up with store names that sound like something out of a chapter from “Lost Horizons.” Their shops are called Kiwi and Eudoxia and Ligali.

When Melrose Avenue was shaped into a top shopping spot in the mid-1980s, the stores capitalized on a chic clientele who wanted high-end fashion. One of the premiere stores at the time was Ecru, which sold top-of-the-line men’s fashions.

In the 1980s, retailers were paying $4 a square foot to lease space. When the recession hit in the early 1990s, the average rent declined to $3 to $3.50 a square foot as the vacancy rate climbed to 10 percent.

High-end retailers were replaced by funky clothing stores and used-clothing shops. By the end of the 1990s, the avenue was back on a roll.

“Melrose is the land of a good idea,” said real estate broker Mara.

Many of those “good ideas” require a high volume of sales to a fickle, fad-oriented clientele. And the proprietors who come up with many of the “good ideas” on Melrose tend to be independents whose pockets are not deep enough to weather a sustained economic downturn.

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