Melrose Ave. Aims for Balance of Independent Retailers

The independent spirit still thrives on Melrose Avenue in Los Angeles, but the retail profile on the funky street is changing— again.

The “here today, gone tomorrow” mentality on Melrose has gotten old, said realestate brokers and property owners. Rather than lease to risky prospects with limited resources, leasing agents are now targeting tenants who are apt to stick it out for the long run. As a result, more chain retailers— such as Skechers, Urban Outfitters and Coffee Bean—have taken up space in Melrose’s core next to independent businesses— such as Scoop, Wasteland, Maya, Insanity and Red Balls on Fire—that offer the color and flavor that attract Melrose visitors.

Store owners are confident that the popular avenue will maintain its unique identity.

“The vibe on Melrose is that it’s still pretty good, but people are taking a little bit longer to pull the trigger [on real-estate deals],” said Rob Bader, a broker with Sachse Real Estate Co. in Los Angeles.

Bader said the street still has not fully recovered from the drop in tourist traffic that occurred after Sept. 11. Every block reveals posted leasing signs. Kate Spade handbags sit untouched in the window of one failed business. Signs promoting sales are prominent in existing shops.

“Melrose goes through trends that don’t last long,” Bader said. “The tenants here don’t have billions of dollars to back them up, so you’ll see some business failures.”

And still there is a broad mix of merchandise on the street.

“The store next to ours has been vacant for four months,” noted Magnus Walker, president of Los Angeles–based Serious Clothing, which has maintained a store on Melrose for five years. “We’ve also seen more of the [Santee] Alley/downtown-type of stores coming in.”

Nevertheless, Phillipe Chicha, who owns several properties in the area, said the climate is improving.

“We’re not seeing as many tenants who are in business for their first time,” he said. “Some are even well-capitalized. I would rather let a space sit vacant for six months than give it to the first tenant that wants it. There’s more screening done now.”

Some veteran store owners in the area don’t mind seeing a few chains taking up residence.

“They bring in traffic, too,” said one apparel retailer, who declined to be named. “If you sell the right merchandise and hire good salespeople, you can still compete, no problem.”

Indeed, hot cult brands—such as Lords and Von Dutch Originals, which opened on Melrose about two years ago—are attracting more hipsters and celebrities to the street, said Von Dutch’s chief operating officer, Caroline Rothwell.

“We’ve been able to use the store to break the mold and sell to core customers and fashion customers, as well,” Rothwell said.

Last month, the store opened a “hot kouture” section to add refined items, such as leather goods and $400 handmade jeans, to its merchandise mix. Rothwell said the Melrose store, as Von Dutch’s “window to the world,” gives the company exposure, as well as important feedback.

The slack off in the economy has not done much to affect lease rates, which run from $2 to $7 per square foot. Prices depend on factors such as what side of the street a retail space is on to how high its ceiling is, according to Chicha.

“You have to consider many things like frontage, expenses, air conditioning and, of course, location,” Chicha said. “If you don’t know what you’re doing, you can spend $30,000 to $40,000 on improvements.”

With much of Melrose’s core district made up of small, 1,500-square-foot spaces, the area still favors boutiques rather than chain stores—a fact that’s good news for the independent retailers that still predominate. —Robert McAllister