5 Reasons Why L.A. Is the Place to Be for Retailers

Los Angeles has good weather, consumer tourism and plenty of square feet — and as a bonus, one of the world’s biggest sports stars, the LeBron James. Over the past year, the City of Angels has become heaven on earth for footwear brands and retailers, which are taking advantage of L.A.’s many assets to set up experiential flagships or test store concepts that cater to a different kind of shopper: one who is digitally engaged and trend-conscious. FN looks at how the city is giving retail a new lease on life.

1. Good Neighbors

Angelenos welcome retailers that can blend in and mingle with the crowd.

L.A. consumers prefer to connect with brands that resonate on a personal level, so retailers have taken note by customizing their store experience.

Nike, for instance, opened Nike by Melrose in July — a hyperlocal shop with a pop-up vibe that caters to consumers within the closest five ZIP codes, curated using data from its many digital properties. Heidi O’Neill, president of Nike Direct, told FN, “What we’re looking to do is know our consumers as individuals.”

Similarly, Fred Segal subscribes to the idea that big things come in small packages. The storied retailer, which has been a major West Coast player since 1975, is returning to L.A.’s posh Malibu community early next year with a 4,000-square-foot shop. (A significant difference from its 21,000-square-foot flagship on Sunset Boulevard in West Hollywood, which debuted last year and features a store and restaurant.)

The Malibu shop will have a tightly curated selection of product with local appeal as well as house an exclusive sneaker store. “Malibu will have some specific shop-in-shops that are perfect for that environment — it’s going to have a very indoor-outdoor feel that is the epitome of L.A., laid-back luxe,” said John Frierson, president of Fred Segal. “We allow the brands to creatively express themselves in our world, and it makes for a much stronger experience.”

2. Life of the Party

All business and no play isn’t fun for shoppers or stores.

As consumers increasingly seek to engage with their favorite brands in ways that don’t involve opening their wallets, L.A. stores are turning retail floors — and parking lots — into designated party spots. The spaces can be utilized for activations, workshops and charity functions — all as a way to become immersed in the community in an authentic way.

That’s how Depop, a London-based digital social shopping platform with 1.5 million active users, attracted local buzz when it opened a brick-and-mortar location in Silverlake in March after a series of temporary launches. “We were already hosting listing parties, meet-ups and pop-ups in coffee shops, parks and bars,” said Joan Costello, head of U.S. marketing. “We outgrew them all very quickly and wanted to have a dedicated space for us and our community to connect, create and learn from each other.”

The social marketplace experienced 130 percent growth in the U.S. market last year, much of it concentrated on the West Coast. “L.A. was a natural choice [for our store], as the city currently holds our most active users in the U.S. market,” said Costello.

Bodega’s founding partner, Oliver Mak, also noted that L.A. has a large socializing appeal. “The nightlife and music industry is world-class here, so we can throw better parties,” he said.

3. Coming to America

Blue skies and warm temps spell sales all year round.

For companies with roots in moderate climates, L.A. is a chance to share a similar lifestyle and sell products that aren’t forgotten come winter. Beach-inspired surf and flip-flop brands have been drawn to the market for decades for this reason. More recently, though, overseas fashion labels are catching on to L.A.’s appeal.

Luxury footwear brand Romero+McPaul, known for its ultrachic velvet slippers, opened its first U.S. store on Aug. 9 in West Hollywood. This marks the sixth boutique in its stable of outposts, which also includes locations in Colombia and Mexico.

“We thought a physical space would give us a better beginning in the U.S.,” said Patricio Jourdain, a partner. “We created a bespoke section, and the decorations are suitable for L.A. — very beachy. We don’t have this in the other stores. We adapted our brand to the U.S. to communicate properly with the customer here.”

West Hollywood, in particular, is part of the strategy. “It has smaller brands and new up-and-comers — not the large ones like everywhere else,” said Hernán Junco, who co-founded the brand in 2012 with Raul González.

“Trends are born in L.A., and that comes from the influence of small boutiques,” added Jourdain.

4. Big Business

It’s hip to be square-foot smart.

Brands and retailers can find properties in trendy L.A. communities that give them room to spread out. So some companies are going big.

Boston-based Bodega opened its second flagship in downtown in March, spread over 8,000 square feet. “L.A. has space,” said founding partner Mak. “We have four times the amount of floor space as our original location [in Boston]. Our imagination can roam here, and different environments can be built with distinct stories. And since the weather is nice, we can always consider outdoor components.” he said.

Luxury e-consignment store The RealReal opened an L.A. outpost in July in a 12,000-square-foot property in West Hollywood — that’s double the size of its New York store, which opened in Soho in 2017. Included in this new flagship is its first men’s store, featuring a sneakerdome of luxury and streetwear styles.

Chief merchant Rati Levesque noted that the DTC site needed ample room to fulfill its plans. “The building was a huge draw for us,” she said. “It was hard to find a building that has the capacity to do what we do. You won’t see it, but we have a big back of house where they are shipping hundreds of packages.”

5. Social Studies

L.A. is a hub for tapping into consumers who are in the know.

For direct-to-consumer labels — and even legacy fashion names — L.A. offers an opportunity to connect with a diverse and community-oriented audience. And at a time when big-box shops have lost their appeal, this population is eager to hear fresh messaging and narratives from brands.

“If you look at how retail is evolving, retailers are reconnecting with experiential and curated relationships,” explained Stefan Midford, president and CEO of Natural Insight, a consultancy firm that specializes in retail customer experiences. “[Concept shops and temporary pop-ups] allow retailers to assess opportunities and get feedback, so L.A. becomes a logical place.”

The city’s neighborhoods represent a range of diverse lifestyles — there are artists in downtown, entrepreneurs in hipster-friendly Silverlake, affluent spenders in Beverly Hills and trendsetters in West Hollywood. So stores in those areas present a chance for brands to follow the money and culture.

“In any market, you’re looking for a match between products and the clientele,” Midford said. “[Retailers] can test price points they couldn’t in other parts of the country. Also, L.A. has a combination of influencers and others who are connected to so many other things through social, the media and the movie industry.”

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