Brett Marz has plenty of elbow room these days probably too much.
As owner of Bamko, a manufacturing and marketing consulting firm, he and several employees have been occupying a 7,200-square-foot showroom at the California Market Center.
The firm needs plenty of space to develop marketing plans for clients’ products, ranging from stuffed animals to toy figurines. And for the past two months Bamko has had it as the only tenant on the 10th floor of the downtown L.A. fashion mart.
“We’re the lonely rangers around here,” said Marz, a 27-year-old entrepreneur who got his start in 1999 making custom T-shirts for USC fraternities.
Marz wouldn’t have felt that way just a few years ago. In fact, the empty corridors at the 3 million square foot market center are a fairly recent phenomenon, reflecting the collapse of the housing market.
The 110 E. Ninth St. building, in the heart of the Fashion District, has long been a leading showcase for apparel manufacturers to display their wares to boutique and chain store buyers. But seven years ago as the housing market heated up, the market’s then-owner Hertz Investment Group decided to expand into gifts and home furnishings.
It seemed like a great idea at the time, and at the height of the housing boom a few years ago as many as 600 home furnishing and gift manufacturers were leasing individual showrooms in Tower C, one of the market’s three towers.
But with the recession and the housing bust reducing home furnishing sales about 20 percent and shutting down thousands of retailers nationwide, Tower C has been hit hard: There are only about 200 gift and home tenants left.
“We have a massive building with lots of empty space,” said Deborah Levine, a spokeswoman for Jamison Group, the L.A. company that bought the mart in 2005.
The California Market Center is not the only showroom in town hit hard by the recession and housing bust. There’s also LA Mart, a wholesale gift and home furnishings center with 200 showrooms on South Broadway.
The mart has competed with the California Market Center and admits losing tenants, but would not disclose its vacancy rate.
“There’ve been a number of bankruptcies and consolidations which means that our anchors have changed,” said Joan Ulrich, senior vice president for Merchandise Mart Properties Inc., the Chicago firm that owns and manages the property, also in downtown but outside the Fashion District.
However, with about half of the market center’s 724,000 square feet of space devoted to gifts, she said, tenants have been somewhat easier to replace than in the furnishing industry.
“We probably have more vacancies right now than we have in recent years, but, thankfully, it’s a relatively easy field to enter and new resources are coming in all the time,” Ulrich said.
The Pacific Design Center, the leading interior design showroom on the West Coast, claims not to have lost any tenants at its 130 showrooms. However, the 1.2 million-square-foot West Hollywood facility has felt the downturn.
“Our vendors are doing fine, though, obviously, some better than others,” said marketing director Ellen Rubin, who attributed the center’s relative well-being to its high-end wholesalers, which serve “a certain higher echelon end user.”
Indeed, the fact that the California Market Center’s expansion into gifts and home furnishing has been hit hard did not surprise industry officials and rivals.
“Basically, they are a fashion wholesale building and that’s been their root,” said LA Mart’s Ulrich. “Most people think of the California Market Center as serving the fashion industry; when you think of gifts, you don’t think of them.”
Kent Smith, executive director of the Los Angeles Fashion District, the area’s business improvement district, agreed with that assessment, calling the center’s adventure in gifts and home furnishings “an excursion” that didn’t pan out.
“It was a bold move at the time,” he said, “but time and the economy has shown that it just wasn’t right.”
New tenants
The Jamison Group has attempted to replace its lost tenants with an aggressive search for new ones. But so far only three have leased space.
There is Pansun, a sportswear company, on the 11th floor; Marz’s Bamko one floor below; and Fashion Business Inc., a non-profit offering educational fashion-industry workshops, training and seminars on the seventh floor.
“We needed a larger space. We love the openness,” said Fashion Business owner Frances Harder, whose 7,000-square-foot suite includes offices, meeting rooms and a large computer learning lab. “I’ve been in this industry for 24 years and this building has been its heart.”
Levine of Jamison Group wouldn’t say how much of the 252,000-square-foot Tower C is still up for grabs, nor the current asking rents. But she said Jamison is negotiating with potential new tenants, not all of whom are clothing wholesalers.
“We’ve found an interest among current fashion tenants for outside services, as well as outside services that want to be close to our existing tenants,” she said.
She places both marketer Bamko and professional education services firm Fashion Business in that category.
“It’s a shift,” Levine said, “that we think will be productive.”
