Melrose in Flux

It’s a neighborhood feeling those achy growing pains.

The rising star of Melrose Heights, so dubbed by the informal merchants’ association and home to of-the-moment retailers Ron Herman at Fred Segal, Miu Miu and Costume National, is in limbo.

On the one hand, there’s been an exodus of high-profile names such as year-old Daryl K, Liza Bruce and Anthony Franco from the area’s hub at Melrose Avenue and Crescent Heights Boulevard. Most retailers, though, concur that their departures were premature business decisions or were due to extenuating circumstances—Daryl Kerrigan’s corporate parent, Pegasus Apparel Group, scaled back operations.

The flip side is that new retailers are in the wings waiting to ink deals. Ruby Group LLC recently purchased the 10,500-acre lot on the southeast corner of Melrose and Crescent Heights, directly across the street from Fred Segal. Chris Mara, a broker with Hilton & Hyland representing the developer, said negotiations are wrapping up with a prominent international apparel company for the new retail site.

Still, the real estate shuffle compounded with dreary retail sales and a jittery economy has left existing businesses a bit wary.

“I would be lying if I said I wasn’t concerned about it,” said Gordon Morikawa, co-owner of Xin, a spare boutique showcasing eclectic lines Spyne, Corey Lynn Calter and Carries. “It’s been a bumpy first quarter. The April elections and pending strike in Hollywood threw L.A. into a tizzy.”

New York transplant Lotta Stensson, who opened her eponymous boutique last fall, is hoping to simply break even this year while she grows accustomed to Los Angeles’ shopping milieu.

“It’s been slower than I anticipated,” she said. “I’m from New York—-people catch on quicker there. If they see something in Nolita, they hop on the subway and go get it. People are more regional here, more cautious.”

Not all stores in the area are having a rocky start. Italian-based Fornarina, which sells $30 T-shirts and $80 shoes, is benefiting from its advertisements in Nylon, Surface and Tokion magazines and its lower price points compared to its surrounding brethren.

“We’re surpassing expectations,” said Mirina Chung, assistant marketing director. “People expect more exorbitant prices on this side of Melrose.”

Chung said she believes that upward trend will continue with the arrival of newcomers to the area.

Designer Henry Duarte will open his new boutique, Duarte, later this month in the 900-square-foot space vacated by Bruce. Property owner Jerry Felsenthal is also courting interest from two national retailers and one local store for Daryl K’s former 2,500-square-foot storefront.

New designers, however, won’t be the silver bullet for the area. A lack of parking and a dearth of cafes and restaurants make shopping less inviting along Melrose. Most shoppers tend to cluster at Fred Segal, where they can park and eat, never returning to the corridor.

“The restaurant situation is bad,” Stensson said. “People come in tired and thirsty and we have to send them away for something to eat.”

City officials acknowledge merchant concerns, but contend that resolving the issue remains tricky. The city code requires dining establishments to provide adequate customer parking.

“Melrose is my nightmare,” said Alan Willis, principal transportation engineer for the city of Los Angeles’ Department of Transportation. “It’s one thing to get the money; it’s another to get the land. I’ve talked to people in the area to lease vacant lots and there’s no way it will pencil out for us.”

Willis said the key is entering into a partnership.

“We’re looking into a public/private deal like Hollywood has done. Let’s say a CPK [California Pizza Kitchen] goes in the area, then we’ll partner with them,” he said.

In the meantime, store owners are changing focus. Emma Gold is hosting its first in-store fashion show on June 20. Owner Mark Goldstein will promote Los Angeles designers Koi, Rebecca Rich and Josh & He Yang at the event.

“We’re planning to buy more local designers,” said Goldstein, who also owns Madison on Robertson Boulevard and at Brentwood Gardens. “L.A. people like L.A. clothing. The designers are cutting edge and they understand the L.A. lifestyle.”

Likewise, Melrose retailer Ventilo is tweaking its Paris-designed image—layered, lacy and asymmetrical—to be more congruent with Los Angeles’ climate. The merchants’ association also is stepping up efforts to work directly with newly elected 5th District councilman Jack Weiss to recruit corporate involvement including neighbor Pacific Bell and to formalize the organization into a business improvement district.

The difficulty in getting the word out about the community is no surprise to area veteran Herman, who’s having his own identity crisis. For the past 25 years, Herman, who took over from his uncle Fred Segal, now owner of the Santa Monica store, has been trying to communicate to his vendors and suppliers his company name as Ron Herman Inc. minus the Segal moniker.

“Shipments for me still end up going to the Santa Monica store,” said Herman, who has steadfastly refused to join the merchants’ association.“People aren’t used to change.”