The Los Angeles Fashion District Fights to Bring Back Business

Inside the New Moon restaurant, a Chinese eatery in the heart of the Los Angeles Fashion District, the lunch crowd was sparse on a recent afternoon when store owners and buyers were in town for Los Angeles Market Week.

Of the 22 tables, only three were occupied. One waiter worked the floor while the sole cook in the kitchen sautéed dumplings in a frying pan.

The restaurant’s general manager, Juan Galindo, was packing little plastic containers with soy sauce and hot chiles during the slow lunch hour. He lamented that more customers hadn’t come in that day. “Business has been hit or miss for some time, but our catering business is coming back,” he said. “A lot of our customers are still working from home.”

The New Moon has long been the go-to spot for fashion district showrooms to order trays of food for their visiting store buyers or to walk across the street for a reasonably priced lunch from a menu known for its tasty Chinese chicken salad.

It is also like the canary in the coal mine. If things are good at the New Moon, they are good in the Los Angeles Fashion District. But like the New Moon, the Los Angeles Fashion District is still limping back to life.

Showroom vacancies remain higher than before the pandemic. Many showroom owners went out of business or moved their operations to their homes. Others are sharing showrooms to save money.

Not helping matters is the California Market Center, a massive modern concrete structure first opened in 1963 as the largest showroom center in the region.

The 13-story complex — so large it has its own zip code — loomed over the area like an ugly giant.  At one time, the complex’s three interconnected buildings housed some 1,000 showrooms spanning 1.8 million square feet.

Showrooms were so sought after that some tenants paid key money, or an extra fee, to secure a showroom lease. But as e-commerce competed with brick-and-mortar stores, showroom occupancy slowly dwindled over the years before the pandemic.

In 2017, Brookfield Properties bought a controlling interest in the building and spent $170 million to totally revamp each building. One building was reserved for showrooms and the other two were marketed as creative office space.

To give the complex a new look, Brookfield worked with architecture and design firm Gensler to develop a cleaner and sleeker complex to attract creative types searching for a modern work spot in downtown Los Angeles. The outside of the building was reclad with floor-to-ceiling energy-efficient windows and attractive landscaping adorned a revamped front patio populated with tables, chairs and umbrellas.

Brookfield unveiled the attractive and contemporary redesign of the two creative office space buildings early this year. Currently, they remain mostly vacant. The third building for showrooms has been open for some time, and tenants have been slowly returning.

“The essence of the building has been a challenge,” said Sande Zipser, the corporate sales manager for the Lindi/Oopera showroom, which has been at the California Market Center for years. “Showrooms are coming to the CMC, but it is slow. A lot of people moved out of the building when it was being remodeled and moved to other buildings.”

But two major corporate tenants are coming to the creative-office buildings in the months to come. Adidas is waiting for 107,000 square feet of office space to be built out for its marketing, design and sales force. Forever 21 will be moving its headquarters from east of downtown Los Angeles to the complex when its office space is built out.

The California Market Center has not formally announced Forever 21’s arrival, but it did confirm through an email that the parent company of Forever 21, Simon Properties Authentic Retail Corp., signed a long-term lease that retail estate sources said should encompass 100,000 square feet.

Forever 21’s current headquarters are seven miles east of downtown L.A. in an old Macy’s furniture outlet store the fast-fashion retailer sold for $166 million in 2019, the same year it filed for bankruptcy protection. Since then, it has been renting space in the 2.1 million-square-foot structure.

Forever 21 employees already are working at the California Market Center out of temporary spaces on the eighth and ninth floors of the showroom building, said Elizabeth Beery, Forever 21’s vice president of buying, who was checking out merchandise lined up on clothing racks on the ninth floor. “We are really excited to be moving into downtown Los Angeles and the Fashion District,” she said.

The top three floors of the showroom building are occupied by the headquarters for the Ross Stores buying offices.

Corporate tenants should help fill up the complex’s ground floor spaces reserved primarily for restaurants and retail. Right now, they are mostly empty. Earlier this year, Brookfield announced that Urbanspace, a food hall with 19 restaurants, would be coming to the ground floor. That hasn’t materialized yet. And a fitness center slated for the ground floor hasn’t opened either.

On the showroom side of the complex, there has been some positive movement. At the beginning of the year, the CMC had about 30 showrooms. Now there are approximately 80 showrooms scattered over seven floors with the heaviest representation being the 24 children’s wear showrooms on the fifth floor.

Kristian Rene, owner of Junkie Collection, opened her first showroom on the CMC’s fourth floor two years ago even though the rent was higher than other showroom buildings. The California Market Center offered smaller showrooms like hers at 600 square feet, which helped save money. “The experience of having a showroom has opened me up to new avenues, doing more business and getting to meet all kinds of people I feel I wouldn’t have met otherwise,” she said during the June 12 to June 16 market week. (There are no attendance figures readily available for the number of buyers or store owners at the market week.)

Across the street at The New Mart, a 96-year-old brick structure with around 100 showrooms, the vacancy rate hovers around 15 percent compared to a nearly full building before COVID-19 turned things around.

Before the pandemic, Designers and Agents, a contemporary brand trade show, was held four times a year on the building’s third floor. That has been reduced to twice a year, leaving another income gap. To fill the Designers and Agents void, The New Mart’s general manager, Tom Keefer, revamped the third floor. He took the walls down to the bare brick, enhancing the artistic environment of the 15,000-square-foot space and better exposing the fashion runway at the back.

For the recent Los Angeles Fashion Market, four nights of swimwear fashion shows were held. Some 20 designers organized shows in conjunction with Art Hearts Fashion, whose owner Erik Rosete is known for his Los Angeles fashion week events in March and October as well as runway shows in New York and Miami. “It was wildly successful,” Keefer said. “Frankly, we are trying to bring more excitement into the downtown fashion community.”

More excitement would be good news for the high-end boutiques that sprouted up in the area over the last few years. Before the pandemic, L.A.’s Fashion District was gaining buzz as a hip place to be. New boutique hotels, such as the Ace Hotel and the Freehand, opened in renovated historic buildings, enticing a cool and creative crowd. Apple was renovating a downtrodden 1927 Renaissance-revival theater with painted ceilings for its latest retail adventure.

One of the first designer labels to risk coming to the fashion district when retail was still a gamble was A.P.C. The French ready-to-wear brand known for its denim arrived in 2015 and is still around. But things have been challenging. “Before the pandemic, business was pretty good,” said Ayako Woods, a salesperson who keeps the store’s front door locked for security reasons. “But business has been up and down.”

She said the A.P.C. stores in the artsy Silver Lake district of Los Angeles and in West Hollywood are doing much better.

In January 2020, Ganni, the Danish women’s wear line, joined the club of exclusive stores on South Broadway, down the block from the Apple store, which opened in mid-2021 after a three-year renovation.

Business is just starting to pick up as high-rise apartment buildings fill up with residents. “We knew coming in that it was going to be slow,” said Adrian Manzo, the store supervisor, who said the store was closed for six months during the height of the pandemic.

A few doors down, the British designer Paul Smith opened a 1,200-square-foot store in July 2020. It too had to close for six months. Sales started to return about six months ago with more lawyers and office tenants returning to their workspaces.

“Before the pandemic, you really saw the neighborhood taking off,” said Luis Prado, the Paul Smith store manager. “But the pandemic hit this neighborhood harder than others. We’re hoping it comes back.”