There’s a new message coming out of downtown’s Toy district just in time for the holiday shopping season: “Never buy retail.”
The district that traditionally hawks wares to wholesale buyers and distributors is launching a marketing campaign that will position itself as a family destination where parents can purchase inexpensive dolls, bikes and skateboards for their children.
The push comes on the heels of the area’s clean-up efforts, which have slowly wooed more pedestrian traffic.
“It used to be people wouldn’t stroll the area. They didn’t feel safe to park their cars and walk on the streets. That perception is slowly changing and we trace a lot of that to the positive impacts that have developed following the formation of the Fashion Business Improvement District,” said Tracey Lovejoy, executive director of the Central City East Association, which administers the BID.
Bounded by Fourth and Los Angeles streets, the area’s BID was formed in April. Some 40 property owners and 100 merchants will be assessed yearly to pay for maintenance, security patrol and marketing efforts, amounting to a $162,000 annual budget. The area got a promotional boost last Christmas with the stringing of 44 holiday banners.
The coming ad campaign has a budget of only $10,000, to be paid through BID funds. Though the dollar amount is small, Lovejoy said organizers hope to maximize the campaign through co-promotions with radio and cable TV stations that target the Latino audience.
“The majority of our clientele is Hispanic families and wives who want to bargain. They’re in their mid-30s and come from Boyle Heights, Pico Rivera and El Sereno,” Lovejoy said. “Maybe we’ll expand our campaign to include higher incomes next year, but it’s difficult to reach the suburban housewife in San Fernando who might not find it worth it to come here to save a few dollars.”
Nearly all the merchants in the Toy District are Asian entrepreneurs from China, Hong Kong, Korea and Vietnam. Although most of the stores distribute non-brand-name merchandise such as lookalike Barbie dolls, some have brought in toys from such large manufacturers as Mattel Inc.
The shopping experience itself is a world away from the average Los Angeles mall.
Walk into a store, and you’ll often see small Buddhist altars erected for good luck. The lack of real decor in the stores is meant to showcase the dozens of items that crowd the shelves, along with cardboard cartons stacked four or five high on the floor.
Prices are nowhere to be found. Usually, shoppers negotiate and haggle with clerks; the more you buy, the less you’re likely to pay.
Despite improvements following the formation of the BID, the community still has its share of woes. Street corners are still crowded with transients living in makeshift shelters. Missions and shelters pepper the district.
“You’ve still got the overlay of the homeless and disadvantaged there,” said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. “If shoppers encounter them, they may feel uncomfortable or unhappy.”
Another strike against the district is its minimal parking. There’s only one rooftop public parking lot, and city meters on the street often charge 25 cents for 10 minutes. Parallel parking can get tricky when large trucks carrying toy shipments from Asia block the streets.
“We won’t have the parking issue resolved by this Christmas. It will be a project for next year,” Lovejoy said. “Fortunately, most of our shoppers come in and out within an hour, so that should help matters.”
Charlie Woo, chairman of the Toy District Advisory Board, said publicity from the coming ad campaign is one step in creating a shopping identity for the area.
“I think everybody will benefit from this,” said Woo, who launched ABC Toys in 1979 along Fourth Street and opened his 120,000-square-foot Megatoys outside of the district 10 years ago. “Smaller distributors can benefit from a retail rush, and property owners can charge higher rents if you have retail activity.”
Indeed, rents in the area have doubled in the last three years and now go for between $1.50 and $3 a square foot per month, according to real estate brokers.
“It’s been in a major growth pattern many of those streets are 100 percent occupied,” said Brad Luster, a managing partner at Major Properties. “Property values are also climbing. You’re seeing sales of $100 to $300 a square foot, roughly double of what it was three years ago.”
Some merchants, however, express concern that the additional consumer traffic may simply complicate matters without adding appreciably to sales.
“A lot of people aren’t interested in retail because it can cause a lot of headaches,” said Tom Trinh, owner of Santa’s Toy Corp. on Fourth Street. “Individual shoppers need more time to decide and often want to return things.”
Yet the advantage of retail mark-ups is hard to dismiss, he said. Wholesalers tend to add only about 15 percent to the manufacturer’s price, while retailers can mark up inventory by 50 percent or more.
“Certainly, it doesn’t hurt business,” he said.
