The Cotter family has seen a lot of changes in the 75 years they’ve operated their Manhattan Shoe Repair store in downtown Manhattan Beach. But nothing as dramatic as the past six to 12 months, said store owner Bill Cotter.
“It used to be one person moved out and a new person came in a day later,” Cotter said. “Now stores stay vacant.”
Cotter traced the start of the downtown slowdown to the 2006 Manhattan Avenue fire that destroyed El Sombrero and Old Venice restaurants, Riley’s Art Gallery, MONA clothing and a photo developer. The restaurants had brought in hundreds of people nightly to window shop downtown.
In 2007, downtown sales tax revenue decreased by 2.2 percent.
But stores really felt the crux of the nation-wide recession in late 2009.
“Holiday season was frighteningly slow,” said Rose Jacobson, who has owned the women’s sportswear store Cotton Cargo for 30 years. “But in the last three months there has been a difference. Sales are not where they were but they certainly are more acceptable.”
Last year’s fourth quarter citywide sales tax revenue was down 8.2 percent, or $164,256.
While promotional sales are typical right after the holidays, stores were constantly having sales from October 2008 until this February, indicative of a brewing problem, said Mary Ann Varni, executive director of the Downtown Manhattan Beach Business and Professional Association.
“First quarter was tough,” she said. “A lot of business owners cut back hours, did what big companies are doing to make it right.”
Over the past year, a dozen or more downtown businesses closed their doors. Among the casualties were the children’s store Sprout, the exercise studio Space, and We Love Pets.
“That was a loss because it was our pet store in town,” she said.
The clothing chains American Apparel and Free People replaced a cooking store and sports store downtown.
Mayor Portia Cohen grew concern when historical businesses started closing shop.
“While I know it didn’t make much of a difference in city sales revenue, the impact was on the psyche of residents and visitors who are drawn to our downtown as a ‘place to be,’ she said. “Just the visual of an empty storefront in a small area has a huge impact.”
Citywide since 2007, electronic and appliance stores sales tax revenue decreased by nearly 20 percent, family apparel stores by 16 percent, women’s apparel by 17.4 percent and home furnishings by 37 percent.
While downtown shop owners say business has picked up in the past few months, the city’s 2009-10 budget predicts sales and use tax revenue will decrease by $680,000 next year, or nearly 11 percent. The city’s total revenue for 2008 decreased by 2.1 percent from 2007, said city finance director Bruce Moe.

Making Changes
When Trance boutique owner David Oliver saw the recession coming right before the holidays, he cancelled a ton of orders, including all leather jackets and anything over $600, said boutique associate Adrianna Sabogal, who has worked with Oliver for 15 years. The store lowered its prices and ensured that customer service was their main priority.
“Are we suffering? Certainly. Are we suffering terribly? Absolutely not,” Sabogal said. “When the economy is doing great, we’re doing phenomenal; when the economy is bad we’re doing fine.”
Sabogal said only the strong will survive the slump.
“The people who deserve to be in business will stay in business, the people who shouldn’t have businesses, won’t,” she said. “We survived the 1980s, we’ll survive this.”
Lindsey Aguilar, manager of the 3rd Gallery boutique on Manhattan Beach Boulevard, said sales decreased last fall. To battle sinking revenue, store owners “cheaply revamped” their sister store, Dolly Rocker, located next door, by lowering the price point to $150 and under.
“We used to be able to sell a few things and make money,” she said. “Now we have to sell more.”
To help businesses, especially small, independent stores, ride out the rocky times, City Council, the Chamber of Commerce and Downtown Manhattan Beach Business and Professional Association stepped in, prompting “Buy Manhattan” campaigns and even lowering the parking meter rates by 40 percent, from $1.25 to 75 cents an hour for a six-month period.
“What were trying to do is reach out to the community and remind them, if you love your downtown, support your downtown,” Varni said. “These businesses can’t stay open without you.”
Varni said people have to realize how important it is to keep their spending local.
“People know intellectually what it means, but I don’t think they really get it. The store you go to all the time could be closed if you don’t support it,” she said.
This summer, the Chamber will host a series of workshops with topics including fundamental business accounting and marketing.
Varni said in downtown they will host monthly events such as staying open later on certain nights and will tie into events such as the AVP Manhattan Open volleyball tournament and the weekly Farmer’s Market.

An Unbiased Recession
Empty storefronts and “For Lease” signs expand well beyond the city’s downtown.
The recession is unbiased, sinking its talons into retailers, caterers, travel agents, financial advisors and Realtors, according to David Curry, chair of the Chamber of Commerce Board of Directors.
Mayor Cohen said the Council will work with the Chamber to create a Business Improvement Districts (BID) across the city to match the North End’s BID, which has prompted physical improvements to their crosswalks and landscaping.
City Council has prioritized areas of town that are cause for concern, like the Sepulveda Corridor, which hasn’t been looked at in years, Cohen said.
“The city’s not focused on Sepulveda and knows it needs to,” she said.
In July, the city will review its 2009/10 work plan and prioritize traffic, parking and zoning updates for Sepulveda Boulevard, which is saturated with empty commercial storefronts.
“For the past 10 to 15 years we’ve been able to take businesses for granted,” she said. “We’ve had major developments in the city. But there are not those types of possibilities anymore. There’s not a lot of vacant land.”
Cohen said potential areas for redevelopment include the Vons grocery store downtown, whose plan to redevelop three years ago was halted when the economy faltered. The Union Bank next door also submitted plans to the city to move its building to the front of Manhattan Beach Boulevard and move parking to the back.
Cohen said redevelopment there could match Metlox plaza, whose sales tax revenue increased by four percent last year.
The city’s top sales producers include big box stores such as Target, Fry’s, Old Navy and REI, all of whom declined to comment on their sales figures.
While Varni said an influx of chains to downtown can help with foot traffic, she doesn’t want it to become a “chain downtown.”
“It will lose its integrity and charm,” she said.
Cohen said experts say a 30-70 percent mix of chains and boutiques provides the best ratio for prosperity in a small town business environment.
“I’m positive about the downtown,” she said. “Our latest retail sales figures reflect slight improvement.”
Some stores avoided the retail slump altogether.
Brieana Altamura, owner of the high-end boutique Bombshell in downtown, said there are days she doesn’t do anything and days she reaches $10,000.
“I thank God every day,” Altamura said. “Every day there’s something new that closed. I count my blessings that I’m still open.”
Jacobson said it’s all comparative now. A good day today may have been a lousy one three years ago.
“You get your days. You have to run it that way,” she said. “Whether you’re very, very busy or no one has come in the past two hours. Be glad for what you get.” ER