A Tough Sell : Economy: At Village Del Amo in Torrance, eight of 22 storefront spaces are empty. Some businesses have vanished virtually overnight.

To the passerby, the Village Del Amo commercial center in Torrance would seem a retailer’s dream. Cars cruise its curved drives, shoppers stroll along shaded walkways and diners in its row of trendy chain restaurants sample everything from apple pie to sushi.

A closer look, though, reveals that the Hawthorne Boulevard complex is feeling the effects of recession. Indeed, the village illustrates how shock waves from the downturn, intensified locally by layoffs in the aerospace industry, are reverberating throughout the South Bay economy, sinking some businesses while creating opportunities for others.

Most conspicuous is the sufferings of small business. Eight of the village’s 22 storefront spaces are empty, with some small enterprises vanishing overnight.

And the going is tough for those that remain.

“We’re dying and there’s no help,” said 22-year-old Adam Schwindt of Postmaster Plus, his parents’ small postal center. Schwindt started his $200-a-week job last year, after money problems forced him to drop out of college.

Said Chris Kim, co-owner with her husband of the village’s one-hour photo store: “We are in trouble. Everybody is going out of business or moving.”

But some businesses are doing well, partly because times are leaner. Although the Curry House restaurant reports a sales decline of 20% so far this year, other eateries--including Soup Plantation and Marie Callender’s--say business is up because people are shunning high-priced meals in favor of lower-cost family dining.

And at the discount chain stores Super Crown Books and COMP USA, sales are also brisk. Among Crown’s most sought-after titles are books about business, including “Marketing Yourself: The Ultimate Job Seeker’s Guide” and “Seven Fat Years and How to Do It Again.”

“People are not happy about going into the mall and paying full price,” said Robert Haft, president and founder of Crown Books.

All 10 Village Del Amo entrepreneurs interviewed for this story say the recession has left the South Bay with a dramatically leaner and meaner business climate. Four spoke at length about how that change has affected them--in some cases close to home.

Sir Speedy

Mike Afrashteh said his wife is annoyed by the weekday evenings and Sundays he works at his Sir Speedy printing and copying shop, catching up on paperwork he would normally pay someone else to handle--if he had the money.

Afrashteh acknowledges that he is not seeing enough of his sons, ages 12 and 3. But with business at the Sir Speedy franchise down 10% this year, on top of a 20% drop last year, the 43-year-old entrepreneur said he simply cannot spare the time.

“You can’t do the things that you wanted to do, like take a vacation,” Afrashteh said. “Especially with the kids, it’s expensive. We have to watch our spending.”

Nor can he afford to buy a new car. “I need a new one,” he said. “I’m driving an ’82 Toyota.”

Like other small-business owners in Village Del Amo, Afrashteh is struggling to keep his doors open and his morale up as nearby businesses founder. Referring to a vacant commercial space that once housed a luggage store, he said: “We came in one Monday and they were gone.”

To make matters worse, one of Afrashteh’s major customers, a real estate firm, moved out almost two years ago, leaving a void in the village--and in Sir Speedy’s cash drawer.

“They had 70 agents,” Afrashteh said. “It took a chunk of our business.”

Competition is intense for what business remains. There are four printing and copying centers nearby and a fifth not far away, he said.

“The only way we can keep going is on our old customers. On a walk-in basis, it’s not that great,” Afrashteh said. He adds, however, that there is one source of walk-in business: “We’re doing lots of resumes (for people who) get laid off from the aerospace firms.”

During good economic times, the shopping center’s location--on Hawthorne Boulevard near Torrance Boulevard and Carson Street--was ideal for business. Now, the location has become a financial albatross.

Rents--about $2,800 a month for the Sir Speedy space--have not been reduced. Afrashteh and other business owners have asked the village’s owner, JMB Properties Co. of Chicago, for rent relief. Thus far, they say, their pleas have gone unheeded.

“We’re all praying for the best,” Afrashteh said. “They say this is going to get better.”

Rogersound Labs

At 31, Gary Hayes of Compton wonders if the best years of his working life are behind him.

Hayes joined the Rogersound Labs audio and visual chain in 1985 and later became manager of the company’s Torrance outlet. He thrived in what he describes as the company’s creative and innovative business climate.

But a private holding company called RS Labs bought the chain in 1989, borrowed heavily to expand and wound up bankrupt in June, closing all 11 stores.

The financial meltdown left Hayes jobless for six weeks. He and his pregnant wife, Sabrina, have a house, two cars and a 6-year-old daughter in private school.

“I feel like a battle-scarred veteran,” said Hayes, who last week began working in sales at the Compton outlet of Circuit City, the giant discount electronics chain.

Hayes described his years with Rogersound as a “breath of fresh air from the way business is usually done.” The chain, he said, used new management techniques to carve out a market for itself among “high-end” customers with money and education.

“We were very well respected,” said Hayes, who started work with Rogersound after a stint in the Army and three years with another electronics chain. “When your customers say they don’t shop anywhere else . . . and they bring their friends. . . . It was so much power to know you could help the guy across the counter.”

The Canoga Park-based chain was founded in 1971 by Howard Rogers, whom Hayes hails as a creative management guru who built a successful “socialist-capitalist model.”

Eschewing commissions and incentives, Rogers promoted the idea of teamwork over competitiveness. Profit-sharing was paid monthly to employees based on their store’s overall sales. Authority was shared and management was minimal and flexible, he recalled. People in one department felt free to give advice to those in another.

But with the new owners, Hayes said, “all of a sudden we had divisions and a lot of departments, and people were expected to pay attention to (their assigned area only).” That, he said, prompted numerous long-time employees to leave the company.

As he starts his new job, Hayes says he is looking on the bright side. He expressed hope that he will find a challenging niche at Circuit City.

“I know how to manage,” he said. “I know enough about the retail business. I feel like a real pro, but definitely battle-scarred.”

COMP USA

Scott Michaelis, 30, general manager of the village’s COMP USA store, said friends in the ailing aerospace industry make it a point these days to stay in touch with him.

The reason? They fear they might soon be laid off. And if they are, Michaelis would be a good person to ask for work.

Part of a Dallas-based computer retail chain, his store is thriving in spite of--and in some respects because of--the recession.

“We’ve hired people just in the last three weeks,” said Michaelis, a Montana native who lives in Irvine.

Like its neighbor, Super Crown Books, COMP USA is in a position to cash in on the downturn because it is a deep-discount chain--a retailer that offers lower prices than other stores selling the same merchandise.

“We operate on a gross (profit) margin of about 13%,” said Nathan Morton, the computer company’s president and chief executive officer. “And that is a lot closer to the warehouse clubs (such as Price Club and Costco).”

Also working in Crown and COMP USA’s favor are their products. Computers and books are sought by well-educated consumers, the same people who know the value of a bargain and how to find it, Morton said.

And when well-educated, white-collar aerospace workers in Southern California get the ax, Morton said, they often become consultants--and need to buy new computers.

Whatever the cause, business is booming at the Torrance store, said Michaelis, who took over as manager of the outlet a year and a half ago. It is not unusual for his store to do $100,000 in sales in a weekend, he said.

The Torrance locale is one of 28 COMP USA stores in the country. In the coming year, the company plans to add 20 stores. Two will be opened in the Los Angeles area, bringing the number here to seven.

In view of the recession, Michaelis considers himself lucky to be working where he is.

“The (economic) survivors are going to be superstores with low overhead and high volume and definitely with customer service,” he said. The key, he added, is to operate at peak efficiency: “We can’t make any mistakes.”

Del Amo Business Park

Like many of his colleagues in the commercial real estate business, broker Chris A. Strickfaden has learned to live with 20% vacancy rates.

“I think we’re doing fine. We’re at 80% occupancy,” Strickfaden said, putting a positive spin on conditions in the village’s 113,000-square-foot office complex, Del Amo Business Park.

From Strickfaden’s point of view, 20% is progress. A year ago when his employer, PM Realty Group of Torrance, took over management and leasing duties in the office complex, the vacancy rate was 30%--a dramatic increase from 1988, when the building was fully rented.

For Strickfaden and other brokers, the recession had turned an already difficult commercial market into a bear of a challenge.

“The Torrance area traditionally has been overbuilt,” Strickfaden said. “There was always enough land . . . and enough money to keep building. And, finally, (layoffs began in the defense industry) and what was an overbuilt situation was compounded with a recession.”

Indeed, the economic downturn in the South Bay real estate market was so swift and so severe that the owners of the Del Amo office buildings defaulted on their mortgage.

Today, the buildings belong to Chase Manhattan Bank, which hired Strickfaden’s firm to manage the complex and figure out how to land more tenants.

“We’ve dropped our rates,” Strickfaden said, ticking off a list of steps he had to take to make the office complex more desirable. “We were at probably $1.75 a square foot and now we’re at $1.55. . . . I’d say others in the area have done the same.”

Strickfaden also put more money into advertising the business park and courting brokers likely to bring in tenants. Commissions for brokers were raised, Strickfaden said.

Ted C. Lawson, who is senior vice president of CB Commercial Real Estate Group in Torrance and is considered the dean of South Bay commercial real estate, echoed much of what Strickfaden said.

Lawson estimates that office building vacancy rates are running anywhere from 18% to 26% in the South Bay. “It’s not just here, that’s a national figure,” Lawson added.

He puts the South Bay vacancy rate for industrial space at 20% to 22%. In retail space, he said, the rate is twice what it was in 1988, meaning that it is about 6.5% today.

That figure may seem inconsequential, Lawson said, but a closer look reveals that the retail vacancy rate is directly tied to the disappearance of small businesses.

“The small tenant is just nowhere to be found,” Lawson said.

Strickfaden remains optimistic about the real estate market, however, saying he believes it will bounce back in the next 18 months.

“I think we’re seeing the worst of it is over,” he said.

View From the Village

A look at 10 businesses in the Village Del Amo center in Torrance reveals that the recession has sent small businesses and commercial real estate brokers reeling--and created opportunities for discount retail chains.

1. Rogersound Labs

2. COMP USA

3. Super Crown Books

4. Just-an-Hour-Photo

5. Curry House Restaurant

6. Sir Speedy

7. Postmaster Plus

8. Del Amo Business Park

9. Marie Callender’s

10. Soup Plantation