LOS ANGELES — Jamison Properties Inc., the private company that is expected to complete a $135 million purchase of the California Market Center by today, faces challenges such as filling vacant showrooms, meeting the needs of tenants and building a management team to run the cornerstone of the Los Angeles fashion industry.
The two million-square-foot complex at Olympic and Main streets, which employs about 90 people, draws an estimated 92,000 visitors a year. The property houses 900 tenants in showrooms that offer women’s, children’s and men’s apparel along with textiles, accessories, gifts and home-accent products. The 13-story building is the main site for the five fashion markets, four gift and home markets and two textile shows.
“It’s key that the person who buys the California Market Center realizes it’s not a real estate play but a business,” said Mark Tarczynski, first vice president of CB Richard Ellis in Los Angeles.
Jamison purchased the complex from Hertz Investment Group and London-based DMG World Media. Hertz bought the property in 2000 from Equitable Life Assurance Co. for about $90 million. DMG came aboard as an owner in 2003. Their legacy includes changing the name of the center from the CaliforniaMart and converting about one-third of the space to gift showrooms.
“We have a great opportunity here, a building with great history and a landmark to the apparel industry,” said the market center’s new general manager, John Kim. “We want to expand on that.”
The immediate goal is a smooth transition, Kim said. That involves restructuring the executive team — about a dozen people have departed or soon will, including Cecil Strickland, executive director of retail relations; Mary Hill, executive director of special events; Lorelynn Eaves, vice president of marketing; Jennifer Uner, executive director of advertising and communications, and general manager Paul Lentz.
Some tenants questioned the ability of Jamison’s staff, which is new to the industry, to successfully manage the market center.
“They have to go through a major learning curve at our expense,” said Hal Kaltman, president of the Textile Association of Los Angeles and a tenant.
David Lee, a medical doctor and the proprietor of Jamison, which owns about 60 office and medical buildings in Los Angeles, declined to comment.
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But Kim said his team already has spent about three months operating from makeshift offices. “We’ve been doing our due diligence,” he said.
The new management group is to include Ben Lee, who will oversee leasing and Jamison’s West L.A. portfolio; Joanne Lee, coordinator of marketing activities, and Eugene Kim (no relation to John), head of operations.
John Kim said he will retain Jackie Riggs as the marketing and communications manager and Charles Snyder to oversee the gift showroom business. In addition, Yvette Beltran will be trade show manager and Deirdre Mendoza, director of public relations, will work as an independent contractor.
“We won’t be so compartmentalized in our management approach,” Kim said. “We’re looking for a more coordinated effort.”
An example of that strategy is maintaining a collaborative spirit between the gift and apparel showrooms. Kim said there are more crossover promotional opportunities between the categories, citing the growth of retailers such as Anthropologie. The team’s biggest challenge may be accommodating the needs of its different constituencies.
“There are a lot of requirements with each apparel category, as well as the general requirements of the building, and we’re hoping to unify those efforts into one need,” Kim said.
Categories flush with opportunity are the men’s and children’s floors, Kim said. The younger men’s market in the surf, skate and snowboarding community is generating the most buzz in Southern California. The market center has dedicated a floor to urban lines as well as a section for streetwear labels, yielding mixed results. Puma signed in January to occupy a 3,500-square-foot corporate showroom on the fourth floor. Oakley has also expressed interest in opening a corporate showroom.
Kim said another way to boost occupancy is targeting designers by expanding showrooms to mix sales and studio space. The Cooper Design Space has had success with its similar model in the last two years. Perhaps even more important than attracting new business is stabilizing the old. Some showroom owners said they worry that the building’s clout would be diluted by a change in merchandising of the floors or a broader tenant mix.
Anchors on the popular contemporary floor, such as showroom owners Stacey Rhoads, Ginny Wong and Christine Simek, moved to the New Mart across Ninth Street and others have relocated to the Cooper and Gerry buildings. Theresa Matthew, a 12-year veteran of the market center who represents Single and Hale Bob, among other lines, is negotiating to switch to the New Mart.
Topping the list of tenant concerns is the marketing budget that affects the industry’s four core buildings. While the buildings typically participate in the fashion markets, the market center shoulders much of the burden of paying for marketing and promotion, a reason it charges about 20 percent more in rent.
Kim said he would maintain the marketing budget for needs such as seeking new cobranding opportunities. He also plans to talk to design companies about changes to the building facade — focusing less on banners and more on branding.
The market center has received votes of confidence from tenants who have renewed leases. Stacy Keyes, owner of a showroom for 15 years, expanded to a new 1,400-square-foot space in the popular B wing on the fifth floor.
“It’s a leap of faith,” she said. “My business is incredible and I’d be a fool to go to another building.”