Recession slows demand for apparel district space: Cal Mart expansion remains on hold for better times.

Recession slows demand for apparel district space

Demand for showroom space in downtown Los Angeles' apparel district remains a bit soft. The recession has slowed demand from clothing manufacturers for attractive quarters to exhibit wares. Manufacturers use these showrooms to display goods to buyers from department stores and specialty shops.

There are three showroom complexes in downtown and by far the largest is the huge, 3-million-square-foot California Mart at Ninth and Spring streets. There are more than 1,500 showrooms representing 12,500 manufacturers in the California Mart, which is a three-building complex on an entire city block.

Some manufacturers say there is nowhere else to be but the California Mart, the 26-year-old granddaddy of West Coast showrooms.

"A showroom presents the first image of a company to a buyer," said Zoe Campbell, marketing director for Pepe Clothing USA, a jeans and popular-clothing maker. "We wanted to quality of the showroom design at the California Mart to reflect the quality we have in our product."

Many big name garment-makers are in the Cal Mart, including Guess?, Pierre Cardin, Levi Strauss & Co., Fame and Swat.

But for the first time in at least a decade, there is some empty space in the Cal Mart, with about 9 percent of showroom space unoccupied. Still, space leases in the $2-to-$3-a-square-foot a month range - comparable to what lawyers pay for top space in the downtown spires.

David Morse, part of the Morse extended family clan that owns and operates Cal Mart, said lean economic times are too blame. "There is no question but that we are weathering a storm. We have to be more responsive than ever to customer needs," said Morse. Still, the month of April was Cal Mart's best month for leasing this year. "We see the light at the end of the tunnel," said Morse. "Things are improving."

The softness in leasing has, in part, iced Cal Mart plans for a 700,000-square-foot expansion, originally designed by achitect Gruen & Associates and slated to have been completed by fall this year.

The expansion was intended to accommodate men's clothing lines, a market segment caught hard by current economic doldrums. "The expansion is in permanent deep freeze," said Morse.

Going a bit stronger is California Mart's smaller rival, the 300,000-square-foot New Mart building, across the street from Cal Mart at 127 Ninth Street.

The 13-story New Mart building - downtown's first office "skyscraper," built in 1927 - has been undergoing conversion from manufacturing to showroom space in the last seven years. Current tenants include Emil Rutenberg, Claude Z, Leon Max, Diane Freis, Camp Beverly Hills, Bongo, B.U.M. Equipment and Jessica McClintock. Rents are about 80 percent of the Cal Mart's.

Tenants in the New Mart rave about its more-flexible spaces and other amenities such as large windows and high ceilings, and smartly tiled hallways.

Said Jackie Bartolotto, account executive at Rockpool USA, a manufacturer's representative, "This building projects more of a higher end, contemporary feeling to the market. It is more spread out, with fewer tenants per floor."

The New Mart has rehabbed 11 of its 12 floors into showroom space, and is seeking tenants for soon-to-be-completed ninth floor. "All the space is leased up except for the (new) ninth floor," said Bruce Entner, New Mart manager for the building's owner, Ben Eisenberg Properties. "For us, demand or space has been fine."

The third showroom downtown is the Eastern Columbia building on Ninth Street and Broadway, a green-tiled architectural gem. Among the tenants are High-Tech, Directors West and Portfolio Beverly Hills. The building recently got a new owner, the JFI Realty Co.

PHOTO : Apparel: Times are tight