Footwear retailers here are starting to get some relief.
While unemployment remains significantly higher than the national average, and the economic recovery has trailed behind New York and other regions of the country, Los Angeles is starting to see signs of a retail rebound.
David Jassem, owner of four Los Angeles-area David’s Shoe Salon boutiques, said business is up dramatically over a year ago, close to 2008 sales figures. “I definitely feel like we have turned the corner,” he said. “The attitude of the customers is completely different. We’re seeing customers we haven’t seen for two or three years, so something has definitely changed. I still feel it’s very fragile, [but] we’re headed in the right direction.”
At American Rag, CEO Mark Werts said his stores have returned to the good times of the mid-2000s, with footwear sales up 30 percent over last year. “American Rag is booming,” he said. “We’re sometimes back to 2005 figures.”
Werts added that the strength of the business is owed to a constant flow of fresh product, as well as an improved consumer mood.
Mark Goldstein, owner of five Madison boutiques, as well as Diavolina, said business is slowly returning, though not as quickly as he would like. “It’s quite a bit down from the peak of 2006. 2009 was the bottom, 2010 came back a little and 2011 is creeping back ever so slightly,” he said, noting that sales this April are tracking up 10 percent compared with last year.
Val Surf co-owner Mark Richards, however, said the situation is complex and largely unpredictable. “There are moments when we have reason to be encouraged and it looks like things are bouncing back, and then a couple of days later, all of a sudden, it just stops,” he said. “There is an inconsistency in the marketplace like I’ve never seen before.”
Part of that inconsistency could be due to unemployment, which, while falling, still remains high. The unemployment rate in Los Angeles County in March dipped to a seasonally adjusted 12.1 percent, down from 12.4 in February, according to the California Employment De- velopment Department.
Gas prices, which averaged $4.20 per gallon as of April 19, are also a concern, particularly for middle- and low-income workers.
“The issue is that gasoline prices are rising and drain- ing purchasing power,” said Nancy Sidhu, chief economist in The Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. “This is an issue, particularly for low- and modest-wage workers. In Los Angeles, almost everyone drives to work. If you give [your money] to the gas station, you’re not going to have the money to go buy the more-expensive running shoes.”
Higher gas prices are adding to consumer anxiety, which is why some retailers still believe a full recovery is a ways off.
“I don’t think we’ll see a big turnaround until the 2012 back-to-school [season],” said Andy Harris, owner of three Harry Harris children’s shoe stores. “I’ve been through six recessions and I get the feeling we’re not there yet. People have to be saving money before they start spending money, and they aren’t saving just yet.”