Why Global Brands Want In On LA's Retail Evolution

Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.

Leading Broadway's killer A-game is the Ace Hotel's co-owner Tungsten Property, which recruited brands both global (Sweden’s Acne Studios, Oz’s Aesop, France’s A.P.C.) and Stateside (Tanner Goods) to help build the once-booming boulevard’s retail resurgence. Elsewhere, cult-cool labels from around the globe are plotting their US domination from stretches like North Beverly Drive, Melrose Place, and the long-commercialized Abbot Kinney. Here's why.

The Evolution Will Be 'Grammed

Los Angeles is considered the fourth trend-setting city in the world after New York, Paris, and London, says luxury retail realtor Jay Luchs of Newmark Grubb Knight Frank. "In LA, we have celebrities, stylists, PR people, writers—a community of people that work together, he notes. Celebrity culture is also credited for the City of Angel's fashion influencer status. "Outside of that small industry world, what's [most] important in fashion [right now] are celebrities and who's wearing your clothing."

Today, blogstars are also part of this circle of tastemakers. In their perfectly-curated social media presences, they're getting caffeinated at Melrose Place's Alfred Coffee right before hitting up The Row a few doors down, or grubbing at Joan's on Third after making a pit stop at Ragdoll on West Third Street, or exploring Acne after a drink at Ace Hotel's LA Chapter.

"Social media is hugely important now to fashion and where stores go and who comes into LA," remarks Luchs. When upwards of one to three million pairs of eyes follow your everyday moves, important retail people take notice: like high-end realtors and brands vying for a style blogger's lucrative market.

Then and now: Westminster Avenue and Abbot Kinney Boulevard (originally West Washington Boulevard) in the early 1910s and in 2015. Undated photo: USC Digital Library

Rents Aren't Too Damn High

After Hong Kong, the Big Apple is the next priciest city for retail rentals, according to The Real Deal. The New York real estate pub notes that Room & Board's massive Chelsea outpost commanded $125 per ground floor square foot and $70 per second- and third-floor square foot. To quote one colorful NY political hopeful, that's quite damn high—perhaps another reason why international brands, like Australia's BNKR and cult-favorite Parisian retailer L'Eclaireur, are heading to the West Coast first.

Although New York boasts "international prestige," retailers struggle to find the right location at the right price and still manage to break even, explains DTLA Rising blogger and realtor Brigham Yen. Name-checking essential designer boutique Brigade for paving the way for "high-quality" brands, he says opening an outpost in DTLA is "a win-win situation for retailers. Ultimately, [a brand's] image matters and Downtown no longer has that [seedy] stigma; it's cool and edgy now."

In Downtown's very buzzing Financial District at 7th Street—home to FIGat7th and The Bloc—rents are between $5 to $6 per square foot a month (or $60 to $72 per annum), says Yen. "Three years ago it might've been $3.50 a foot; it's definitely climbed up," he says. Over in the Arts District, space is going for about $4 per square foot, while the Historic Core hovers between $3.75 to $4 per square foot per month.

Then and now: View of the Eastern Columbia building at South Broadway and Ninth Street in 1951 and 2015. 1951 photo: LA Public Library

In West Hollywood, luxe-loving Melrose Place spaces go for around $12 to $15 per square foot, says Luchs. Industry insider-filled WeHo "is a central zone where you can't go wrong if you're a fashion brand," he notes.

Not far at on-the-rise North Beverly Drive, where Swedish brand Cos opened its first US store last year (beating out NY's opening thanks to construction setbacks, but we'll take it) and where Sephora is slated to open next month, rents are between $15 to $20 per square foot a month or $180 to $240 per annum, he adds.

Prices are at a record high on upscale bohemian-frequented Abbot Kinney, states Luchs, where cult-fave newcomers like Illesteva, Iro, and Rag & Bone are likely paying around $15 per square foot per month.

Illesteva's first West Coast boutique on Abbot Kinney.

Why Brands Aren't Banking on Malls

The rise in rents may be blamed for the exodus of the indie boutiques that helped establish the traditionally laid-back Venice stretch's rep as a capsule of creativity, but Luchs maintains that Abbot Kinney's expats aren't the only ones who are hurting.

Mom and pop shops and big-box brands "are in trouble everywhere [because] they're competing with the internet," he notes. Before, joining a mall's directory "essentially was less about being cool and more about foot traffic," he adds. As Racked readers note, shoppers today are seeking more "creative" retail therapy experiences, especially if they can walk into a brick-and-mortar at a tourist hot spot like The Grove and shop the same inventory for less online.

It's why many fashion brands are passing on traditional bricked fortresses and moving into local shopping stretches or forward-thinking mixed-use developments instead. "You’re not going to a mall because a street is what really defines you," says Luchs. In the case of Abbot Kinney, "you're defining who you are. You're showing that you're not mainstream, but you're local-minded and hip."

A rendering of how The Bloc, formerly Macy's Plaza, will look when it reopens this fall. Ratkovich Company

What's Next for LA Retail

Within the next 10 years, "Downtown is really gonna become a retail hot spot," says Yen. "We're still not there completely," he maintains, adding that the "detrimental" Jewelry District is what's keeping areas like the Historic Core and the Financial District from connecting.

Abbot Kinney and Broadway "both had coordinated revitalizations," says Curbed LA senior editor Adrian Glick Kudler. "Off the top of my head, Sunset Junction [in Silver Lake] and Melrose [Avenue] are interesting in that they've resisted corporatizing, [which is] in major contrast to Melrose Place."

In West Hollywood, Melrose Avenue between La Cienega and San Vicente Boulevards "is picking up a lot," states Luchs. Alice + Olivia's relocated flagship, Agent Provocateur's affordably-priced brand L'Agent, Alfred Coffee's In the Alley, and Cycle House's new and improved studio recently moved into the same mixed-use building, and there's even and effort to rebrand that corridor within the officially-designated West Hollywood Design District as the Melrose District.

Alice + Olivia's new flagship at Melrose Avenue and La Cienega. Alice + Olivia

As far as cult-corporate brands delivering the final nail on the commercialization coffins of indie stretches, LA realtors and shop owners point out that it's simply the nature of a modern-day city's unstoppable retail evolution.

"No successful retail center ever relies exclusively on just the residents in one particular area," says DTLA-based Yen. Citing the recent closures at ShopWalk haven Sixth and Spring Streets, the realtor says indie boutiques won't hurt by having a neighboring mainstream retailer that attract foot traffic.

Round2 LA store owner Rocco Espinoza, who opened in the area five years ago when Kapsoul and SixHundred LA were his only other retail neighbors, notes that he's met more tourists than ever shopping and staying in DTLA over the past year.

"Chain stores like Zara, Urban Outfitters, and many more securing locations in and around the Historic Core is only going to help us mom and pop shops—I say bring them," he says. "They spend more money on advertising than we could ever in a lifetime."

Urban Outfitters's Rialto Theatre store. Elizabeth Daniels

"We have weathered the ups and downs; we've seen stores come and go," he recounts. "But for every store that leaves, there are 10 waiting to move in," he notes, naming new additions like House of Vintage, Les Tres Lingerie, Desaur Boutique, Velazca, and others. "[Plus] where in LA can you pay $9 to park for 24 hours and shop, watch a movie, and eat at one of dozens of amazing new restaurants within a five-block radius?"

"Change happens in many places," says Luchs. "Local businesses are going to see positive sales when bigger names come in," and many stores even go on to create new retail destinations in unchartered territory.

Mona Moore's relocated boutique on Main Street.

Star-faved milliner Nick Fouquet, who ditched his former pricey corridor for nearby Lincoln Boulevard, recently told us that his new haunt "is really beginning to change." Longtime Abbot Kinney tenants Mona Moore, Pamela Barish, and LFrank teamed up to create III Luxury Collective on low-key Main Street, where Japanese home goods mecca Muji and Anthro-faved Aussie brand Lazybones landed within the last year.

And Rodeo Drive? Although the luxury street was snubbed by Moschino creative director Jeremy Scott—who opted to open the Italian fashion house's first US store on Beverly Boulevard—Luchs says it's "stronger than it's ever been."

Labels like Saint Laurent, Prada, Ferragamo, and Louis Vuitton recently renovated their Rodeo outposts, a sign that the photo op-ready street still reigns supreme. "Besides from sales, it is really important for their brand," says Luchs.

Whether it's arriving in the States by way of Beverly Hills and Venice (like Iro, which has stores in both cities), making a West Coast debut on Broadway and Beverly Boulevards (like NYC's Oak), or sitting pretty on Rodeo, it really it all about keeping up an image.

A special thanks in researching historical archives for this story goes to Nathan Masters at LA as Subject.

This article was updated with additional details on Tungsten Property's role in Broadway's development.