A boutique is the kind of place where kid glove treatment, often by the proprietor herself, drives sales. Now, even this market niche is being transformed by the Web.

Celebrities like Jessica Simpson and Angelina Jolie first spread the word about Intuition, which sells voguish jeans, some priced at more than $300. Recent growth has been online, driven by shoppers who might live many miles even a couple of time zones from the Pico Boulevard store.

"I am really flattered by the amount of attention my Web site is getting right now," said Jaye Hersh, president of Intuition. Online sales have risen 300 percent so far this year from the like period a year ago and now make up 60 percent of total sales volume.

Sales at the Web site for Lisa Kline, a clothing boutique with four local locations, have had double-digit monthly growth. The store revamped its Web site a little over a year ago to handle more product lines.

"You can see us featured on E! (Entertainment Television) and that gave us a tremendous amount of national exposure," said spokeswoman Amy Gobin. "People went to the Web site girls and guys out in the Midwest that don't have boutiques like this."

True Religion Apparel Inc., the Los Angeles-based manufacturer whose jeans have been worn by Kate Hudson and Cameron Diaz, will start selling online on May 1.

Charles Lesser, True Religion's chief financial officer, believes that the site will generate several hundred thousand dollars in monthly jeans sales. The jeans are priced from $172 to more than $300.

"The intention is to find those customers who wake up in Kansas who say, 'I went on a business trip, and I heard about True Religion,'" he said.

Mintel International Group Ltd. estimates that the online apparel market, which grew to $6.1 billion in 2004 from $3.4 billion in 2002, will grow 9 to 12 percent per year until 2009, while the clothing catalogs business will decrease 2 percent to 4 percent annually.

Accounting Update
The continuing cleanup in how companies account for leases on their books could well produce the largest number of earnings restatements ever and local public companies are caught up in it.

"This is affecting anybody that has had a store open," said Jack Ciesielski, publisher of The Analyst's Accounting Observer. "When push comes to shove, this will be the broadest one."

The restatements, largely by retail stores and restaurants, had totaled about 250 as of last week, with at least eight local restaurant and retail companies joining in. They have had to scour their leases to determine if they botched the way they value their leases following a Securities and Exchange Commission clarification last month.

So far, the accounting clean-up has not amounted to a financial crisis, but it has caused a pretty good headache. Some firms have had to restate earnings by as much as 8 cents per share, though the impact on local companies so far appears less.

Cheesecake Factory Inc., Hot Topic Inc. and Big 5 Sporting Goods Corp. all reduced earnings for one or more fiscal years, though by just 1 cent per share. "In most cases, they haven't changed the numbers a whole lot," said Ellen Tolley, a spokeswoman for the National Retail Federation. "They are just moving stuff around."

Still, the total impact is uncertain because several local companies have yet to restate. They include California Pizza Kitchen Inc., 99 Cents Only Stores and Worldwide Restaurant Concepts Inc.

The clarification is requiring the businesses to account for rent breaks and lease expenses when they occur, rather than stretching them out over periods that have sometimes exceeded a lease's length.

Going Organic
Organic Holding Company Inc. has successfully bid to take over 12 Briazz Inc. sandwich shops, including six in Southern California, for $1.35 million.

The Briazz locations will be converted into Organic To Go stores over the next three months. Organic to Go launched this year with its first location in Seattle and specializes in organic takeout and delivery meals.

Issaquah, Wash.-based Organic Holding beat out an offer by Flying Food Group, a Chicago-based purveyor of ready-made meals, to control Briazz locations. Seattle-based Briazz filed for bankruptcy protection last year.

90210 Numbers
A survey of retailers and restaurant owners released this week by the Beverly Hills Chamber of Commerce shows that 43 percent said that sales in the first quarter bested those in the like period a year earlier, while 23 percent reported flat numbers. The survey is conducted quarterly by Pollack PR Marketing Group.

Thomas Blumenthal, chief executive of Gearys, predicted that the Beverly Hills retail market wouldn't slow down in upcoming quarters. "Even though the second quarter is still only two and a half weeks old, we're still maintaining that trend," he said.

*Staff reporter Rachel Brown can be reached by phone at (323) 549-5225, ext. 224, or by e-mail at rbrown@labusinessjournal.com .

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