L.A. retail centers adopt Hispanic flavor to survive; repositioning reflects change in L.A. demographics.

Many Los Angeles area shopping centers will have to be repositioned toward Hispanic consumers to survive L.A. County's changing ethnic makeup, according to investment and marketing advisers.

Investment advisers like Stanley Iezman, president of American Realty Advisors in Glendale, say the repositioning of centers is only in its infancy and that most mainstream U.S. retailers have been slow to catch on.

"Mainstream retailers have totally ignored ethnic marketing," Iezman asserted. He cited demographic trends showing Hispanics growing rapidly as a percentage of the overall L.A. County population at the same time the Anglo percentage is declining.

Anglos now represent slightly under 40 percent of the county's population, while Latinos represent nearly 38 percent, according to 1990 U.S. Census figures. Hispanics represent the fastest-growing segment of the local population, up nearly 28 percent in the last 10 years.

Among those advising centers on repositioning is Jose Legaspi of the Montebello-based Legaspi Co.

Legaspi said some supermarket chains, like Vons Cos. Inc. with its Tianguis stores, have already recognized the demographic shift. Major national advertisers launched campaigns as far back as eight years ago to target the Hispanic market, but most major retailers operating stores in the Los Angeles area have been slow to catch on and may be left behind, he said.

Legaspi said designing or repositioning a shopping center for the Hispanic market means choosing the right kinds of tenants and ensuring that the center is promoted toward the Hispanic community. This includes orienting it toward the family and scheduling sales or other events for Mother's Day, Father's Day, Mexican Independence Day (Sept. 16) and other times of the year that are important to the Latino community.

Legaspi said his company is working on repositioning the Indian Hills Mall in Pomona and was involved in repositioning Fiesta Marketplace, a 200,000-square-foot center in downtown Santa Ana.

"At Indian Hills we're suggesting a play area for children, recommending family-oriented restaurants and suggesting other changes to make it more family-oriented," Legaspi said. At Fiesta Marketplace, the center brought in the Metropolitan Theaters chain, family-oriented restaurants and clothing stores that cater to the Hispanic market.

Legaspi, who said Fiesta Marketplace is "fully leased and doing well after three years," said the family orientation is important because Latinos tend to shop as a family.

Legaspi added that Latinos obviously "need shoes, clothing and everything else you would see in a traditional shopping center, but from retailers who know and understand the Hispanic market."

There are also important differences in how a center should be designed to serve Latinos.

"Service-oriented businesses -- like attorneys, doctors, dentists and accountants who do tax preparation -- all of these become almost retail in the Hispanic market because much of the business is walk-in trade," he said.

He added that other services, such as check-cashing and payment centers for utilities, are also important. "Many times we'll bring in a utility, like Edison or the gas company to provide a payment office," he said.

According to Iezman, many mainstream retailers mistakenly believe Latino consumers don't have much purchasing power, but they actually have "tremendous amounts of disposable income." Legaspi said that purchasing power would be evident to "anyone who walks along South Broadway in Los Angeles or Pacific Boulevard in Huntington Park," two of the busiest Hispanic shopping districts in the county.

Legaspi said the significance of the Latino market has been proven in stores like Tianguis, a wholly owned, Latino-oriented subsidiary of Arcadia-based Vons.

The first Tianguis store was opened in Montebello in 1987. Since then, Vons has opened eight more Tianguis stores, with plans for "several other stores during the next few years," said Julie Reynolds, a Vons spokeswoman.

A Tianguis fact sheet supplied by Vons said the company "believes that the 4.5 million Latinos in the Southern California marketplace have been under-served by the supermarket community.

Vons' solution has been to design the Tianguis stores with "all of the goods and services found in a more traditional supermarket," while providing more "authentic Mexican goods" and staffing the entire store with bilingual workers. Vons spokeswoman Reynolds said the store name, Spanish for "the marketplace," helps "build a special niche for our stores in the Latino communities."

Kirsten Moy, a vice president at Equitable Real Estate Investment Management Inc., agreed that shopping centers in or near Hispanic communities could represent an overlooked opportunity.

She said Los Angeles is one of "a handful of cities growing at a phenomenal rate, due primarily to immigration, and the traditional real estate market is not rushing in to serve these new immigrants."

Iezman said American Realty Advisors also has been "involved in repositioning" some properties, although he declined to name specific centers. Iezman further stated that some shopping centers that are performing poorly for their investors could turn into winners if repositioned.

The eventual repositioning of centers will be "the true recognition that a majority of our major metropolitan areas are becoming ethnically diverse," he said.

For investors in those centers, he said, "The reality is that we have to identify what that ethnic diversification means and how to best position the properties that we own in those markets."