Toy Town : Bustling Wholesale District Springs Up Amid Squalor of Skid Row

When Kim Hau fled Vietnam on a boat crowded with refugees 12 years ago, he had no idea he would wind up one day in the toy business, ringing up about $1 million in sales a year.

Nor did he imagine that he would be prospering in, of all places, Los Angeles’ Skid Row.

But improbability reigns around East 4th Street, not far from City Hall, where Hau launched a modest business several years ago.

Fourth and Wall streets, hard by the missions and homeless encampments, is the heart of Toy Town, as the locals call it. It is one of the city’s newest, most unusual--and booming--business districts.

An area that had been a dreary monotony of pawn shops, thrift stores and cheap hotels five years ago is now home to about 300 wholesalers and importers of inexpensive toys from Asia.

Nearly all the merchants are ethnic Chinese immigrants, mainly from Vietnam, but also from Hong Kong and Taiwan. A few are Korean Americans. Some of the entrepreneurs, such as Kim Hau, were nearly penniless refugees little more than a decade ago.

Most of their customers run mom-and-pop businesses in L.A.’s ethnic neighborhoods, ranging from a Korean immigrant who operates a downtown gift shop to a Lebanese man who sells toys at a Sun Valley swap meet. Others are exporters with business ties in Mexico and South America.

Although many of the wholesale toy merchants and customers do not speak fluent English, the language gap does not seem to hamper sales.

“It’s no problem,” said William Wap, a sales clerk in Hau’s store, called 88 Toys. “Sometimes customers speak English, sometimes Korean, sometimes Spanish. Or they just point.”

The shop owners--usually husband and wife or other family member--stand by with pencil, pad and calculator, ready to jot down orders and haggle over prices.

Largely in this fashion, the wholesale toy district generated an estimated $1 billion in sales last year, according to industry experts.

Toy Town “just sort of sprang up out of nowhere,” said Jack Kyser, formerly the chief economist for the Los Angeles Area Chamber of Commerce and now an analyst with the nonprofit Los Angeles County Economic Development Corp. “It just all of a sudden exploded. And it’s in the strangest area you could ever want to see.”

Downtown’s sprawling toy market occupies an area bounded roughly by 3rd, San Pedro, 6th and Los Angeles streets. Located in an industrial sector known as Central City East, the toy district is north of the wholesale flower and apparel markets and west of the seafood processing district. Artists’ lofts are scattered throughout the area, as well as the city’s largest concentration of shelters and other agencies serving the homeless.

Toy Town’s distinctively ethnic flavor sets it apart. In a spot near the cash register, most of the shop owners keep small altars to Buddha or various Chinese ancestral figures revered for their honesty, bravery or other virtues. Some of the stores also have small mirrors hanging above the front door, a bow to an ages-old Chinese superstition that the mirrors will deflect evil spirits.

“It’s a fascinating place,” said Maxene Johnston, who runs the nearby Weingart Center and does her Christmas shopping in Toy Town. “It’s the closest thing in L.A. to the cosmopolitan mumbo jumbo that you’d find in New York.”

The stores are crammed with thousands of items, ranging from roaring, battery-powered jets to plastic dinosaurs and tiny flasks of soap bubbles. Most of the toys are made in China, Korea, Thailand, Hong Kong or Taiwan and are sold at better than bargain basement prices. A dozen jump ropes may cost as little as $5. A dozen Barbie-like dolls might go for as low as $8. While most of the merchants prefer to sell on a wholesale basis, they also welcome customers who want to buy only one or two items.

“This place is the best for bargains,” said Sun Valley swap meet vendor Ralph Saab, explaining why he makes a least two trips a week to downtown’s toy markets. After one recent shopping foray, he loaded about $200 worth of doll strollers, rocking horses, baby walkers and battery-operated cars into the back seat of his Buick. “You can find everything here. There are always new things.”

Los Angeles Police Sgt. Larry Thompson, who has worked in the central city for 15 years, said the toy merchants have brought dramatic changes, both good and bad, to the area. Toward November, he said, traffic gridlock will set in, with delivery trucks and holiday shoppers competing for scarce parking. Littering also has increased. City sanitation crews complain that the tough plastic strips used to bind the huge toy crates often are left on the streets and wind up damaging street-sweeping machines.

Thompson also said that many store owners fail to properly dispose of their shipping cartons, which the area’s homeless population turn into the “cardboard condos” seen on nearby streets.

The officer, however, marvels at the business conducted by the immigrant entrepreneurs.

“I cannot believe the amount of toys that come in and out of that place. We’re talking semis and huge bobtail trucks full of toys, just constantly,” Thompson said.

“You wonder where they’re coming from and where they’re going. The volume is tremendous. It’s mind-boggling. And in the middle of Skid Row.”

Toy wholesalers began appearing in the area in the late 1970s, according to Charles Woo, president of the Central City East Assn., whose family runs two of the district’s larger wholesale toy concerns.

But the real growth began about five years ago, for a variety of reasons. A major spur was that trade with Pacific Rim countries was booming, Woo said.

At the same time, the county’s swelling population of Vietnamese immigrants included many who had been merchants in their native country and were looking for business opportunities.

“Some of us came here with money, but many of us came empty-handed,” said Tai Ma, an ethnic Chinese from Vietnam who lost everything when the Communists confiscated his family’s plastics factory. Ma, who arrived in the United States in 1978, opened a store on 4th Street two months ago.

“But the Chinese are willing to work hard. Most of us were business people in Vietnam. So once we got here,” Ma said, “we started looking for some small business to open.”

The wholesale toy trade seemed perfect. It did not require fluent English, formal education or major start-up capital. Downtown’s east side offered an abundance of dirt-cheap warehouse space, as well as a ready supply of day laborers to load and unload delivery trucks.

Not everyone strikes it rich in Toy Town. Many merchants complain that the district has become saturated with toy wholesalers and, as a result, profits have gone down.

Yet toy mogul Woo, a Hong Kong native who abandoned doctoral studies in physics at UCLA to launch ABC Toys in 1979, said the emerging industry has enabled many immigrants to gain a foothold in the mainstream of American society. “If it wasn’t for this business, most of them (immigrant toy merchants) would be busboys in Chinatown. I can’t think of a more American Dream story than this,” he said.

Kim Hau’s evolution from refugee to toy entrepreneur is fairly typical.

In 1979, with his pregnant wife and three young children, he fled Saigon, leaving behind a wholesale fabric business. The family endured a treacherous voyage across the South China Sea--during which their boat was wrecked--and lived for nine months in a Malaysia refugee settlement before receiving approval to emigrate to the United States.

Relaxing at a desk in a Spartan office behind his store, Hau, 47, recalled that when he arrived in this country, he was under the impression that the only business open to Chinese people was restaurants. His first job was as a dishwasher in a Chinese restaurant near Los Angeles International Airport.

In his spare time, he attended English classes at Evans Adult School downtown, where a fellow student suggested that he check out the swap-meet business.

“I went to see how people sell (in swap meets),” he said. “I studied how people ran shops there. I decided to sell toys. I thought they were best. Everyone buys toys.”

Soon Hau was working weekends at a Gardena swap meet. He was making regular trips downtown to buy from the handful of toy wholesalers who had opened on 4th Street.

By 1984, he said, he felt secure enough to quit his restaurant job and go full time into the toy business. With financial help from a few friends, he rented a small storefront on Wall Street and stocked it with merchandise. The whole family put in long hours, taking orders from customers, tending the cash register and keeping the shelves full. Business grew as the area sprouted new stores.

Now, Hau drives a shiny, late-model Cadillac to work each day. Aside from running his store, he also operates a wholesale center, leasing out booths for about $1,500 a month to small gift and toy vendors.

When he moved four years ago from Wall Street to his current, larger building on 4th Street, he renamed the business 88 Toys. He chose that name, his daughter Linda said, because in Cantonese the number eight sounds similar to the word for prosperity. Chinese therefore consider two 8s doubly auspicious.

“Everybody has to try hard to make it in this business,” said Linda Hau. “But you need luck to bring you up, too.”

L.A. Toy District

The wholesale toy district is one of the city’s newest and most unusual commercial areas. An estimated 300 toy merchants have set up shops in the area bounded roughly by 3rd, San Pedro, 6th and Los Angeles streets in downtown Los Angeles.