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CALIFORNIA / News and Insight on Business in the Golden
State | Apparel | HEARD ON THE BEAT

CalMart Is Forging Key Partnerships

November 06, 1997|GEORGE WHITE | TIMES STAFF WRITER

Ilse Metchek can recall when it appeared that the California Mart--the premiere downtown Los Angeles showroom for Southern California's apparel industry--was unraveling.

Giant apparel trade shows in venues such as Las Vegas were attracting more business from a merging and shrinking retail industry, luring buyers who had previously purchased their store inventory from CalMart. As a result, CalMart's vacancy rate rose and wholesale transactions dropped, prompting developers and exhibit hall operators to launch bids to woo away CalMart's frustrated apparel manufacturing tenants.

"There were claims that clothing buyers for retailers did not like downtown Los Angeles, and rivals tried to lure tenants to Santa Monica, West Hollywood and Hawthorne," recalled Metchek, who was CalMart's leasing director during the region's recession years of 1992 through 1994. During that time, would-be competitors mounted their challenges.

Metchek is no longer with CalMart. She's now executive director of the California Fashion Assn., an apparel industry trade group that has been a supportive partner of CalMart. The trade group was formed in 1995 with the support of Los Angeles Mayor Richard Riordan and other city officials who consider CalMart crucial to the region's apparel industry, which ranks second only to aerospace as a manufacturing employer in the Southland.

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That partnership and some CalMart initiatives helped stave off the challenge of local rivals as CalMart's occupancy rate rose from 67% in 1994 to its current level of 78%. Now, CalMart is launching new programs and seeking additional partnerships to survive the continuing challenge of out-of-town trade shows.

The initiatives will be important to the future of the Southland's apparel industry, said Linda Wong, chief financial officer of L.A. Prosper Partners, the economic development organization that inherited the resources and mandate of Rebuild L.A.

"Our apparel industry is finally realizing that it makes sense to have one apparel trade center instead of many because it's easier to forge strategic partnerships," she said.

The mart has stepped up efforts in recent weeks to find new sources of revenue and new markets. Among the initiatives:

* A push for more international trade. For example, CalMart and the California Fashion Assn. introduced Southland-based "rising star" designers to European retailers and the Paris-based fashion press via a videoconference. As a result, a French apparel trade group is now interested in discussing the possibility of exchanges in which Southland designers would exhibit their clothing at European apparel shows.

* A bid to expand CalMart's tenant base beyond the traditional apparel manufacturing showroom. For example, the mart has reserved more wholesale showroom space for manufacturers of gifts and products for the home.

* An effort to promote Southland designers by developing closer ties with the entertainment industry. Under one new agreement, for example, CalMart is introducing producers of MGM's "Fame L.A." television program to Southland designers, who are supplying the show's performers with their on-screen wardrobes.

"The mart is still here because it's finding new ways to do business," said Metchek of the fashion association, which represents manufacturers as well as companies that provide services to the industry.

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Outside observers also are encouraged by developments at CalMart, located at 9th and Main streets in the center of the 2,300-acre Fashion District.

"There's renewed energy at the Mart," said Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County. "The apparel industry needs a primary business center for [retail chain] buying and other activity."

The initiatives are backed by Equitable Life Assurance Society, which has been financing renewal efforts since it gained ownership of the mart during a $250-million loan default foreclosure in 1994.

The biggest challenge to CalMart comes from a neighbor. Woodland Hills-based Magic International organizes a Las Vegas trade show twice a year, and each show attracts far more manufacturers and retail buyers than any other single U.S. trade event. (Trade show organizers generally organize fashion shows for new collections at events that also accommodate makeshift showrooms of visiting manufacturers and designers.)

In contrast, CalMart--the only U.S. apparel showroom center open year-round--has five major trade shows and 20 smaller specialty shows per year. The mart's final trade show of the year ends this week.

"We're not trade show producers--we facilitate business," said CalMart President Sue Scheimann. "If we tried to go head-to-head with the Magic show in Vegas, we'd lose. Manufacturers have to decide where they'll show their merchandise. If we offer them new markets, we'll do fine."

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