Among the funky boutiques, tattoo parlors and foodie restaurants that line eclectic Melrose Avenue, there's a new sight that has longtime store owners and shoppers alarmed: a glut of empty storefronts and for-lease signs.
The situation has gotten so bleak in recent months that along one stretch of Melrose, between Fuller and Martel avenues, one-third of the stores are vacant. And that's despite drastic rent reductions from landlords: A few years ago, retail space went for $5 to $6 a square foot, commercial real estate agents said, but prices lately have fallen to $2 to $3 a square foot — rates not seen in more than a decade.
Since the recession began, shoppers have lamented the closure of some of their favorite businesses, such as longtime vintage haunt Aaardvarks and Italian restaurants Louise's Trattoria and All' Angelo. Remaining merchants have complained about light foot traffic and weak sales, prompting them to slash prices to move inventory.
That's a far cry from two summers ago, when Bill Ortiz owned two women's clothing boutiques in the heart of the bustling shopping district. Sales at the Twisted shops were robust, and Ortiz was just weeks away from signing a lease at the Westside Pavilion and thinking about buying a bigger house for his growing family.
But those plans never materialized after the financial markets plummeted in the fall of 2008. With the economy in a tailspin, shoppers dramatically cut their spending at Ortiz's stores, where bright summer dresses, funky T-shirts and dark-washed denim languished on store shelves.
"Within a couple months, I was losing sleep," he said. "Things changed so fast. I've been in retail since I was 16 and I've never seen anything turn so quickly."
Faced with an uncertain future, Ortiz backed out of the shopping center lease and scrapped plans to buy a new house. One of his stores began losing money, forcing him to close it in December. Business is still way down at the remaining location, a 2,000-square-foot shop that saw sales plunge 30% year-over-year in July.
At the height of its popularity in the 1990s, Melrose was a destination shopping neighborhood and people-watching haven that attracted locals and tourists from around the world.
The area between La Brea and Fairfax avenues had cultivated a unique image as an offbeat street where well-designed, high-quality items could be bought for a decent price — a place "filled exclusively with trend-setting shops, not trend followers," said Philip Klaparda, a commercial real estate broker who leases properties along Melrose.
A tight budget kept Laura Marion, a painter and aspiring singer, away from Melrose for the last two years, but the 22-year-old recently ventured to the area with a friend for an afternoon shopping trip. After browsing in a handful of stores over two hours, the pair still hadn't bought anything.
"The stuff we liked was overpriced, and the stuff we didn't like looked cheap," Marion said. "For me, I only have enough money to buy a shirt. I don't have much disposable income, even for gas."
Although store owners blame the recession for their woes, others contend that Melrose's problems go deeper than the economy. They say the shopping district has fallen from its glory days because of an increasingly run-down feel, restrictive parking measures and an excess of shops all selling the same poorly made apparel from downtown L.A.'s Fashion District.
That has sent savvy shoppers elsewhere to seek out cool, alternative fashions and, Klaparda said, is "driving away several tenants that used to consider Melrose the only place to locate in L.A." to nearby areas such as Fairfax Avenue.
He's advising Melrose landlords to make better decisions about which tenants to bring in, hoping to diversify the shopping choices along the street and protect its "authentic" independent feel.
"There are still plenty of retailers on Melrose that do offer higher-caliber clothing from up-and-coming designers that are distinctive and unique," Klaparda said. "But the emergence of these other retailers who are grabbing things from downtown to target the tourist market has hurt the overall integrity of the street."
The shops along Melrose also appear to be lagging behind mainstream chain stores, which have generally been reporting positive sales figures this year after suffering huge declines last year.
Retail experts said today's budget-conscious, time-strapped shoppers may be more inclined to hit familiar big-box retailers and shopping malls instead of heading to Melrose, where the shopping experience can take longer and be more hit-or-miss.
The prolonged troubles on Melrose have led a group of business owners to form the Melrose Avenue Merchant Alliance, a group that "works to ensure that the Melrose business corridor remains a vibrant destination that — true to its roots — marches to its own unique beat," according to pamphlets that the group is passing around to store owners.
"It took us to hit bottom for us to get together and do it," said alliance member Mat Joseph, owner of Freak Chic, a tattoo and piercing shop on Melrose. Hoping to spur a revival, Joseph said, the group is working to get more regular sidewalk cleaning and better security patrols, and is thinking about organizing community events such as a monthly art walk.
The stores themselves are working to woo shoppers back too, including changing their merchandise lineups and pricing strategies.
At Melrose boutique Timeless, which was devoid of shoppers on a recent afternoon, salesclerk Cat Yeun said that since the recession the store has focused on stocking merchandise that is "more different and eclectic."
"When we first opened we had a lot of high-end stuff, but we've weeded some of that out," she said.
A few doors down, at boutique My Signature, employees are increasingly caving in to shoppers' haggling tactics, store manager Sherry Kashani said.
"I'm not going to lie, it is a little annoying," she said. "But I think in the end they know we're going to budge because desperate times call for desperate measures."
For Ortiz, keeping his remaining store afloat has required drastic changes, including cutting store hours and laying off most of the 15 workers he used to employ. He's down to just four employees and is increasingly taking on "menial tasks" at the store, answering phones, pricing merchandise and ringing up purchases.
"I'm 50 years old. I haven't made the kind of money I'm making now since I graduated from college," he said. "What I take home has gone down about 60% to 70% in two years."
If business gets better, Ortiz hopes to bring back some of the small customer-friendly touches that he's had to do away with, such as wrapping purchases in tissue paper and printing the name of his store on its shopping bags.
"Three years ago or four years ago, if another store that was selling similar products went out of business, I'd be like, 'Yes!' " he said. "Now I don't care if they sell similar products — I just want businesses to open up."