April 22, 2013 -- Aided by a boost from tourists, Downtown Santa Monica stores are holding steady and even showing some sales gains in what continues to be a difficult retail environment nationally.

“Retail is tough right now,” said Nora Wiederspahn, a manager at the Eva Varro apparel shops at Santa Monica Place and Newport Beach. “Everybody is budget conscious.”
While Wiederspahn said business is slow, she added that “we’re definitely up and coming,” noting that the Santa Monica store is cashing in on tourism.

On the national scene, sales for February “were sluggish as weather curbed the consumers’ ability and willingness to shop,” said Michael Niemira, vice president of research and chief economist for the International Council of Shopping Centers.

In addition, changes in the payroll tax have affected spending plans of consumers, according to a survey by the National Retail Federation.

Despite the challenges, some Downtown retailers remain optimistic and report that, even with the inclement weather, sales edged higher.

“I think there has been a general upturn,” said Adamm Gritlefeld, owner of Adamm’s Stained Glass & Gallery on 4th Street. “I’m optimistic.”

As is often the case, there is a decidedly mixed picture among retailers.

Kay Miller, owner of the Mudra apparel shop on the south block of the Promenade, noted that the Brandy Melville clothing store near the new Apple store is “packing in” young shoppers.

At Mudra, business isn’t booming, but the store is doing okay as business has inched up from 2010, Miller said.

Parking issues have added to the challenges facing Downtown retailers. Miller is one of several retailers who says she has been hearing concerns from customers. Downtown Santa Monica Inc. and City staff are working together to alleviate parking and circulation issues.

Some customers also are complaining about increased sales taxes, retailers said. On January 1, the statewide base sales and use tax rate increased one quarter of one percent after California voters approved Proposition 30 to help fund schools and public safety.

What some retailers are positive about now is the impact of visitors. Many Downtown businesses have a strong local customer base, but tourists can make a big difference.

Thanks to a wealth of shoppers from other countries, Eva Varro’s Santa Monica Place store is a little busier than her store in Newport Beach, Wiederspahn said. The store also draws business from the entertainment industry, including stylists from production companies.

Some other retailers also report that tourists are helping keep their sales steady or rising.
Gritlefeld noted that a recent major sale to a customer from Australia helped make his month. Over the years, Gritlefeld has seen a big shift toward tourists among his customer base. “The demographics of buyers has changed so much,” he said.

“I think tourist business has picked up,” said Mark Hennessey, owner of Hennessey & Ingalls art and architecture bookstore on Wilshire Boulevard near the Third Street Promenade.

Reflecting the strength of the visitors industry, Santa Monica hotels had the second highest occupancy rate (85.2 percent) in 2012 among markets in Los Angeles County, according to PKF Consulting, a national hospitality research firm. That was seven percentage points higher than the county average. The year 2012 ended on a strong note, with the occupancy rate up 6.7 percent in December from a year earlier.

While noting a positive impact from tourists, Hennessey said business was flat in 2012, except for the Christmas season, and has not picked up much this year. In the bookstore business, he said, everyone is going leaner and smaller. Hennessey is getting increased on-line business and, despite a substantial drop in store sales from the peak years, said “we’ll be around for a while.”

At Dellarobbia Design Studio & Flower Market on 4th Street across from Santa Monica Place business is good and probably better than last year, said co-owner Jolene Reynolds.

Sales come mostly from local businesses and tourists. “We get a lot of tourists. The hotels send them over,” Reynolds said.

At Shiva Imports on the Promenade, sales are basically flat, but “we are getting tourists,” said owner Naren Patel.

Things are still sweet at the Candy Baron store on the Promenade, where sales were up about 8 percent last year. But it’s too soon to see a pattern for 2013, said owner Ron Baron.

As with some other Downtown retailers, Baron said a lot depends on the weather.
Looking ahead, Gritlefeld is “optimistic for the rest of the year,” noting that “generally, the higher end is what is selling.”