Little Tokyo Feeling Pinch of Japan’s Economic Woes

Japanese tourists by the hundreds still come to Los Angeles’ Little Tokyo every day to browse, take pictures, eat and shop, but they don’t spend much money anymore.

Gone are the days when sleepy-eyed honeymooners just off the plane arrived in Little Tokyo on tour buses, and in the course of 40 minutes at Weller Court gleefully bought $2,000 worth of Ferragamo and Bally handbags and shoes--and even found time for a bowl of noodles or curry rice before returning to the bus.

These days, they are more likely to look for a backpack under $100, or a bottle of cologne for $25, and then stop at a market to pick up a box lunch.

Japan’s economic woes have changed the spending habits of countless tourists, and nobody is feeling the pinch more than Little Tokyo businesspeople.

“We are patiently waiting for something [good] to happen,” said Tsutomu Nagano, general manager of Los Angeles Mifuku Inc. Mifuku, staffed by attentive bilingual salesclerks with impeccable manners reminiscent of shopkeepers’ in Japan, is well-stocked with fine designer merchandise from Europe, but the goods aren’t moving like they once did.

Some merchants worry that unless Japan’s new administration moves quickly to repair the country’s troubled banking system and restore consumer confidence, Little Tokyo’s economy will remain vulnerable. Japan is California’s leading trade partner, and Los Angeles’ top visitor country.

Experts predict that the Asian economic crisis, which began a year ago in Thailand, will slow California’s gross state product growth, which was 5.2% in 1977, by more than 2% in 1999.

In the meantime, businesses are trying to reduce costs and stock less expensive merchandise to appeal to the thinner pocketbooks.

“Rodeo Drive used to be one of our big competitors,” Nagano said. But these days Melrose Avenue and many other places compete with Little Tokyo’s gift shops.

Some businesspeople say tourist spending in Little Tokyo has fallen by 30% to 50% over the past year. Others say this is the worst year since the 1992 riots.

The pessimistic reports come as Little Tokyo celebrates the 58th annual Nisei Week Japanese Festival. Little Tokyo is one of the oldest Japanese-American communities in the continental United States, founded 112 years ago when a former seaman from Japan opened a restaurant on Los Angeles Street.

While tourist-oriented businesses have been the hardest hit recently, even some restaurants and gift shops catering to the locals say they are struggling.

“It goes back to the riots,” said Mickey Okamoto, partner in a Little Tokyo business that is closing at the end of the month. “We only got a touch of it, but the perception out there is that it’s dangerous to come to Little Tokyo.”

In the past six years, numerous businesses in Little Tokyo have closed. Empty spaces abound. The closure last month of Tokyo Kaikan, one of the largest restaurants, and the impending closure of Beverly’s, a combination post office and stationery store, has dampened the mood of even those usually optimistic.

“People are saying, ‘What next?’ ” said Brian Kito, owner of Fugetsu-do confectionary on 1st Street. “There is a mood in the area that’s kind of scary.”

The news of Beverly’s closure has hit the community especially hard. It is a popular spot for neighborhood senior citizens, and its owners, the Narumi family, have roots in Little Tokyo going back three generations.

“Where will old people and people without cars go to mail their packages?” asked Kimiko Wada as she stood in line to send a package.

“Where will I go to buy baseball cards?” asked Tom Mikami, a Little Tokyo resident of 35 years.

But Robert Narumi, an electrical engineer who took over the family business after his father died eight years ago, says he and his partner, Okamoto, simply cannot continue to lose money. “We just can’t make ends meet,” he said.

Narumi and Okamoto said there isn’t the economic support needed from the Japanese American community because Japanese Americans increasingly live in the suburbs and no longer come to Little Tokyo.

“You don’t have to come to Little Tokyo to buy tofu anymore,” said Bill Watanabe, chairman of the Little Tokyo Community Development Advisory Committee, which hopes to raise $140,000 to draw all types of visitors to Little Tokyo by beefing up security and launching a public relations program.

Since 1993, when a group of Little Tokyo business owners started a safety patrol, the area has become much safer, but the perception of danger lingers.

“You used to have families coming to Little Tokyo with their children, but you don’t see that much anymore,” said Frances Hashimoto, president of the Little Tokyo Business Assn.

With the expansion of the Japanese American National Museum and the opening of the East-West Players theater, businesses and community organizations hope to broaden the economic base of the district so that it is not so dependent on tourists.

They also need to improve working relations among diverse groups within Little Tokyo.

It may not be obvious to outsiders, but Little Tokyo has four distinct business sections.

Weller Court, east of San Pedro Street, is very Japanese. First Street and Japanese Village Plaza, bounded by 1st, 2nd, San Pedro and Central streets, is mostly Japanese American. Honda Plaza, bounded by 2nd, 3rd and Alameda streets, attract lunch crowds of all types, both locals and visitors who frequent Beverly’s. And Yaohan Plaza, bounded by 3rd, 4th, Alameda and Central streets, is a mixed bag. The large supermarket on the first floor attracts not only Japanese but also Chinese, Korean, Vietnamese, Latino, African American and white customers.

Businesses and workers in different sections of Little Tokyo say they don’t know what’s happening in the others.

The situation is exacerbated by the fact that business owners are no longer all Japanese but include Chinese, Taiwanese and Koreans. Japanese Village Plaza was recently purchased by a Taiwanese family.

Even among the people of Japanese ancestry, there is a huge cultural gap between recent arrivals from Japan and old-timers born in Los Angeles.

“We may look alike on the outside, but we find it difficult to work with the American-born,” said a worker from Japan. Still, because of their shared stake in Little Tokyo, both groups work together and plan to do a better job of marketing the community.

“What Little Tokyo needs right now is some entrepreneur or group with vision to come here and say this is an opportunity,” said Chris Komai, former editor of the Rafu Shimpo, the oldest Japanese American newspaper in the continental United States. “Look at where we’re located. There are literally thousands of city, county and state workers who can walk to Little Tokyo. There is a tremendous opportunity for a creative person with a vision.”

“We are competing with areas like Old Town in Pasadena, Third Street Promenade in Santa Monica and Universal CityWalk,” said Kito, whose confectionary was started by his grandfather 96 years ago. “Listen, we’re a good place. Don’t give up the boat.”