STROLLING SANTA MONICA’S PROMENADE
Byline: Teresa Jiminez, with contributions from Malik Gaines, Los Angeles
SANTA MONICA, Calif. — Retailers and consumers alike are flocking to Santa Monica’s revitalized Third Street Promenade, making the open-air shopping area a destination for both tourists and locals. The Promenade, which stretches over three blocks, from Broadway to Wilshire Boulevard, features 350 storefronts, 150 of which are boutiques and 80 of which are restaurants. There are also movie theaters and ocean breezes.
While the area has existed as an open-air mall for over thirty years, it did not start booming until this decade. It was originally developed in 1965 along with many similar outdoor malls across the country. Over the years, however, the site was neglected and nearly abandoned.
In 1986, the Santa Monica City Council made the area a development priority and drafted and approved a plan, which used a $13 million bond issue to revamp the potentially prosperous shopping area. The Third Street Promenade reopened in 1989 as a pedestrian zone, and the stores started moving in.
According to Craig Berrett of Mucelli Commercial Real Estate, a company which handles much of the Promenade, the area has become extremely prestigious for retailers. Rents now start at $3 per square foot, compared with five years ago, when a merchant could pay only $1 per square foot.
“The transformation is consistent,” claims Berrett as a response to the notion that the Third Street Promenade has turned a corner in terms of prosperity. He sites Rag Factory and French Connection as some of the more prominent recent additions and claims that there are big deals in the works. “We even have an Austrian ice cream company,” adds Berrett as a testament to the limitless appeal of the Promenade.
One of the area’s pioneers was Urban Outfitters, which opened a store on the Promenade three years ago. It’s move there prompted other stores that specialize in young, hip fashion to seriously consider the outdoor mall.
“We took a risk and it paid off. We saw the potential for it to become a destination, with its good restaurants and movie theaters,” said Wade McDevitt, real estate consultant for Urban Outfitters in Philadelphia.
“Santa Monica opened our eyes. We were able to expand our age base from people in their 20s to people in their low and mid 30s,” McDevitt said. “Everyone [in Southern California] is very body conscious, very fit. They dress what we would consider younger.”
Based on the volume of the Urban Outfitters store, the company decided to open a 15,000-square-foot, two-level Anthropologie store on the Promenade. Opened at the end of August, the Promenade Anthropologie is the company’s largest.
While eight Anthropologie stores are planned nationwide by the end of the year, based on the success of the Santa Monica Urban Outfitters store, the company expects the Promenade Anthropologie to be its most successful.
“This is definitely one of only a few locations in L.A. where there’s foot traffic,” said Anthropologie store manager Scott Gibree, adding that tourists may buy “grab items,” but the serious shoppers are the locals.
Though people may come to visit Santa Monica’s renovated Boardwalk, see a movie or have an Italian dinner, retailers said visitors often find something to buy.
Representatives from half a dozen clothing stores along the Promenade said they chose the location because of the street-fair feel and the fact that other retailers looking for similar customers had set up shop along the new hot spot, including national and local chains such as Banana Republic and Beyond the Beach.
But almost all said that while they usually target younger shoppers from 18-years-old to those in their late 20s, they have found that even shoppers in their 50s like what they have to offer.
French Connection’s West Coast flagship store was opened on the Promenade in April because of the variety of people the area attracts.
“It’s a fine mix because of the client mix. There are tourists and local clientele,” said Gerard Camme, general manager for French Connection’s retail division. “It’s a trendy spot to be in and there’s a lot of foot traffic.”
The company’s bright and airy store is lined with racks of colorful skirts and dresses, all under the French Connection label. Although the store has a young feel, women and men of just about all ages can be seen browsing through the clothes.
“Our line is very diverse,” said Camme. “The clothes appeal to people from 18 to 50. They’re colorful but tasteful.”
Beyond the Beach, a San Diego-based chain that looks for locations just like the Promenade, saw business take off when its doors opened two years ago and has only seen it get better over time.
Company president Dan Goodman said he watched as the renovations of the Santa Monica mall begin to take hold. And while he’s seen similar projects fail, he said that once national retailers began opening up, he became sure of the project’s success.
“It still has a unique character,” Goodman said. “I don’t think people go to shop. It’s more of an entertainment multiuse environment. You go there to have a good time.”
Independent store owners at Rag Factory, which carries men’s and women’s clothes as well as sunglasses and gifts, and Undercover, an upscale women’s clothing store, said they are confident they will be around awhile to ride out the popularity of Third Street.
Neidda M. Shehady said she and Adam Shaffer took a chance and opened the 1,200-square-foot Undercover three years ago after seeing Urban Outfitters move in. They started out slowly by offering contemporary clothes, she said. But they found that their customers were willing to spend more.
So they changed their mix to include bridge and lower-priced designer lines, and a regular clientele came with the change. Their offerings, which include lines from Mark Wong and Joseph, has brought the store’s retail volume to more than $1 million a year.
“We’ve raised the price point of our customers, which is nice,” Shehady said. “We’re kind of like a destination point. Customers who know us come to shop at our store. But others come for the entertainment. We get a lot of tourists.”
Right next door at Rag Factory, owners Wes and Deby Hoaglund offer a mix of designer clothes for both men and women. The 4,000-square-foot store, which opened last December, carries everything from sunglasses and picture frames to Jill Stuart skirts and jackets and men’s designer wear.
The tourist draw and movie theaters have helped boost sales as the store establishes itself, Hoaglund said. The store’s retail volume for the first year could range from $2 to $3 million, he said.
“The movie theaters really fuel the fire. It’s the synergy of everything,” Hoaglund said. “The beach, the pier, the movies — and then the restaurants. Maybe 30 to 40 percent come to shop. But a lot come for the whole thing.” —