An empty room with darkened windows now sits where Australian retailer Peter Alexander once sold $200 pajamas at the region’s newest glitzy shopping center, Americana at Brand.
Four other shops at the Glendale mall are either shuttered or will be soon.
And Kitson, the chic clothing boutique with five stores in Los Angeles and West Hollywood, has announced a significant reduction of its Americana footprint from 15,000 square feet to barely 4,000.
Just over a year after its auspicious black-tie opening attended by Jay Leno and Gov. Arnold Schwarzenegger, the “lifestyle” mall patterned by developer Rick Caruso after his wildly successful L.A. retail center the Grove is suffering from both growing pains and the economic malaise.
“The way I look at it,” said Caruso, principal of Caruso Affiliated, “is that when the tide goes out everybody’s naked. That’s what’s happened in this economy; nobody can hide in the water anymore.”
Among those caught in the receding tide are several stores either closing, or about to, with parent companies that are experiencing broader economic difficulties.
Ruehl boutique is owned by Abercrombie & Fitch Co., which recently announced it would close all 29 of its Ruehl-brand stores; Kira Plastinina, a Russian company has shuttered all of its American stores; and Lucky Kid is a division of Lucky Brand, which is closing some stores.
Already closed at the mall is Bakaos Aveda Salon, owned by a local franchisee who went out of business in May.
None of those companies responded to requests for comment.
Kitson, whose flagship store on Robertson Boulevard has been a favorite of celebrities, is moving Nov. 1 from its present location to the smaller space vacated by Peter Alexander. Kitson experienced a 30 percent decline in companywide revenues from September through May, owner Fraser Ross said. The Americana space is the chain’s largest.
“We believe in the Americana,” he said. “Its aesthetics are great and, as the economy turns around for everybody, it will be a great place to be. But the new store will be less to fill. When you’re smaller, you have a smaller inventory to hold.”
The closures are notable given the high profile of the $400 million mall, which opened in May 2008 just as the country headed into the severe economic downturn. It has 75 stores and a retail mix that includes some low-end outlets such as Rite Aid, but mostly upscale retailers including Barney’s New York Co-Op and Tiffany’s.
Caruso also has 100 luxury condos at the mall, which recently have been selling in the $400,000s. When the units originally went on sale last summer, prices started at $700,000.
Americana is not the only mall dealing with economic issues. Earlier this year, General Growth Properties Inc. which owns and manages more than 200 malls nationwide including the nearby Glendale Galleria filed for bankruptcy protection under Chapter 11. And more than 30 clothing boutiques along Santa Monica’s famed Montana Avenue have recently closed or will be closing.
But even after the recent and announced closures at the Americana, Caruso said the mall boasts a retail occupancy rate of nearly 97 percent. That’s about 7 percentage points above the national average.
“There isn’t a mall or retail shopping project in the U.S. that hasn’t been affected by the downsizing of retailing,” said Malachy Kavanagh, a spokesman for the International Council of Shopping Centers, a trade association based in New York. “You have a number of major retailers that have gone out of business, creating large empty space.”
Other measures
Indeed, by some measures, the mall has been wildly successful.
In its first year of operation, the mall attracted about 16 million visitors almost as many as the Grove, a Caruso spokeswoman said. And on most days, Americana is brimming with people visiting its theater, restaurants and stores.
Philip Lanzafame, Glendale’s director of development services, said the latest projections show the mall is expected to generate about $1.37 million in sales tax revenues in the first two to three years, roughly equivalent to projections before Americana opened.
“We’re very pleased,” Lanzafame said, adding that the mall “is giving us a boost when we’re losing sales tax in other categories.”
Indeed, many stores are doing just fine.
“Business is fantastic,” said Kim Slayton, manager of Juicy Couture, a women’s clothing boutique at Americana.
Though the store has seen a slight decrease in traffic since May due to the recession, she said, sales during the first year more than doubled expectations.
“The mall is a destination for several areas which definitely helps our store,” Slayton said.
But there are inescapable indications of the slowdown. Several stores have prominent markdown signs. Earlier this year before it closed, the Peter Alexander boutique sported one reading, “Beat the recession. Everything is almost free!” And some proprietors have complained openly that potential customers enjoy the ambience, but prefer window shopping to the real thing.
Jim Ellis, dean of USC’s Marshall School of Business, said that the Americana closures don’t necessarily mean trouble for the mall. In fact, Ellis said, the downturn may allow it to attract a mix of retailers better suited to its customers.
“No one wants underperforming retailers,” he said, “and what a recession does is let you replace them with stronger companies.”
Caruso claims that’s precisely what he’s doing.
Already, he said, four new retailers are vying for the Kitson space, which “will be leased before the end of summer.” And the spot now occupied by Lucky Kid has already been promised to a new tenant.
“The good news,” Caruso insisted, “is that we’re exceeding our expectations.”
