Montana Avenue has become a major retail destination for both affluent Angelenos and tourists but in recent months some of its businesses have become victims of the recession.
In the last six months, about 35 businesses have closed. The 10-block street holds 240 businesses and 27 storefronts are empty right now. Most of the closures were apparel stores. The owner of Three Bags Full and past Chair of the Montana Merchants Association (MMA), Jane Walker, told the Mirror that the rents in the district are high. Many of the closures resulted when landlords wouldn’t negotiate lower rents with the storeowners after their sales began plummeting as a result of the recession. Sales really began dropping last October and then began to pick up in April. Her sales “on average have been off 20-40 percent” but in June they were only off by 14 percent.
Walker also has noticed that though people are buying “they are buying less than they used to” because they are being much more careful about what they buy. Another issue is that retail stores are now competing with Internet sales and this has had a major impact on commercial real estate values. Montana has been able to compete more than the chain retailers with the Internet because it has so many boutique stores. Their merchandise is typically very exclusive and high quality.
Montana restaurants according to Walker are faring better because people are giving eating out a priority and they are not affected by Internet sales.
The Mirror also spoke with the current Chair of the MMA, Mark Wain, the owner of Café Luxxe. He stressed that what happened to retail last year on Montana when the global recession hit was no different than what happened to other high end districts such as Los Angeles’ Melrose Avenue and Beverly Hills’ Rodeo Drive. He also noted that as the economy has picked up, the number of tenants going out has lessened particularly in the last month.
In terms of his own business Wain stated his café is doing well. His “business relies heavily on foot traffic” generated by neighborhood traffic and others. His regular neighborhood customers have decided to support his business because they don’t want to see it shut down. He also is seeing a lot of new business from neighborhood residents who have recently moved in.
Members of MMA are sharing their expertise to help make each other stronger. Wain also mentioned that the district’s high end stores “feel the worst is behind them.” If they continue to “pull together as a group, merchants, neighbors, community, city, and landlords Montana Avenue will emerge from this economic situation stronger than before and as a single unit.”