Two high-end supermarket chains are shuttering locations that had suffered from disappointing sales.
HOWS Markets last Wednesday closed its 12,000-square-foot store in Glendale, while Arden Group Inc.’s 37,000-square-foot Gelson’s Market at Paseo Colorado in Pasadena is expected to close in March.
The HOWS store had only been open since last August, while Gelson’s opened in September 2001.
“There’s not enough of a customer base here,” said Mark Oerum, co-owner of HOWS, which is known for its meat, seafood and produce. “It did not meet our expectations as far as what we needed in sales.”
The four-store chain also faced competition from grocers located about a mile from the location, Oerum said, including two Ralphs, Vons, Trader Joe’s and Jons.
Ralphs and HOWS are both on the same side of the Ventura (134) Freeway. In addition, Whole Foods opened a store in Glendale several weeks before HOWS’ Glendale store debuted.
Founded by four former Hughes Family Market executives, HOWS opened its first store in Granada Hills in May 1999. What had been the Hughes stores were converted to Ralphs supermarkets after a series of acquisitions.
HOWS targets what its owners see as a gap in the market between high-end stores such as Gelson’s and Bristol Farms and chains including Vons and Ralphs. HOWS also offers customer service extras such as home delivery and free knife-sharpening.
All of the employees at HOWS in Glendale were offered positions with other HOWS stores, Oerum said. Other locations are in Granada Hills, Pasadena, Malibu and Torrance. The chain also plans to open a roughly 35,000-square-foot store at the corner of Lankershim and Chandler boulevards in J.H. Snyder’s NoHo Commons in about a year.
The Paseo Colorado Gelson’s store was “performing significantly below management’s expectations,” and it may close in the spring, according to a quarterly report issued on Nov. 18 by Arden Group. Its lease runs until 2021, according to filings by Developers Diversified Realty Corp., Paseo Colorado’s landlord. Gelson’s President Robert Stiles did not return calls.
The lagging performance was said to be a result of less-than-expected traffic at the mixed-use project.
Jackie Fernandez, a partner in the consumer business group at Deloitte & Touche, said the hassles of dealing with mall parking and traffic may have hurt the store.
“I’m sure they do get some volume from the apartments and neighboring homes there, but after a while, if you drive there, you want to avoid the traffic and get to locations in a freestanding strip mall where you can pull in and pull out with ease,” she said.
Elsewhere, the Gelson’s store at Westfield Shoppingtown Century City has seen slower sales due to the road improvement project along Santa Monica Boulevard and the center’s makeover, which resulted in the location being shut down for two weeks last fall. Arden Group’s recent filing with the Securities and Exchange Commission noted that while increased foot traffic due to the relocation of the movie theaters, food court and other tenants is anticipated as part of the mall’s renovation, the proximity of new tenants to Gelson’s could cause parking problems.
SBE Pursues Hotel Deals
SBE Entertainment Group, an investment firm in Los Angeles that focuses on real estate development, hospitality and independent film production, has appointed Arash Azarbarzin president of its newly created hotel division.
SBE, in partnership with Kor Hotel Group, already has holdings in Viceroy hotels in Santa Monica and Palm Springs, the Sheraton Gateway LAX and Four Points Sheraton in Santa Monica, and the Summerfield Suites (soon to be known as the Chamberlain) in West Hollywood. SBE has also teamed with construction and development company Makar Properties LLC to acquire the Ritz Plaza Miami Hotel, which is being renovated by Philippe Starck.
Staff reporter Rebecca Flass can be reached at (323) 549-5225, ext. 230, or at
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