California Retailers Continue to Struggle

LOS ANGELES — California retail is likely to get a whole lot worse before it gets better.

In February, the state’s unemployment rate hit 10.5 percent, much higher than the national average of 8.1 percent. For footwear retailers, the result has led to a sales decline unseen by most longtime retail veterans.

David Jassem, owner of four Los Angeles-area David’s Shoe Salon boutiques, said he has seen sales numbers dive in recent months and is preparing for a rough spring and summer.

“We’re down more than ever, and it’s more than we thought we’d be down,” Jassem said of his 21-year-old business. “A lot of shoe people are in it just to survive. It’s more about getting through and knowing you can make money a different time. It’s got to be that philosophy.”

Fred Segal Feet owner Stanley Silver said business conditions are the worst he’s seen in his 39 years in the industry. “Some days at the store you would think there are nails in the door,” he said. “We’ve never experienced anything like this.”

David Assil, owner of several upscale Los Angeles-based Madison boutiques, said he believes the worst is yet to come, as a number of macroeconomic factors continue to chip away at consumer confidence. “I’m worried about it, but there’s nothing I can do,” he said. “I don’t think we’ve seen the bottom yet.”

Assil added that he is anticipating the stock market will slide even further when commercial real estate foreclosures become the next economic hurdle, followed by a collapse of consumers’ ability to service credit card debt. “There is going to be another crash coming in the coming months,” he said. “I believe it’ll go lower in May, June, July. This is what’s coming. How will we hold up to it? I don’t know.”

Even when the economy picks up, Silver said it might be difficult to get consumers back into a buying mindset now that they’ve come to expect significant markdowns. “It’s going to be hard to come back to [full price sales] because we’ve spoiled the consumer,” he said.

Still, the store owner said he fully expects the market to turn around, but not anytime soon. “We will survive because we are survivors,” he said. “It’ll all work out, but it will take about two years.”

Perhaps reflecting the uptick in the sneaker market, Sportie LA co-owner Isack Fadlon has had a very different experience from other retailers. He said that, surprisingly, traffic is up in his four stores, which cater heavily to a teen audience.

While he was unable to attribute the cause of the sales bump, he said he was happy for the change. “We’re seeing increased traffic in our stores,” he said. “Sales are up a bit, and the mood is slightly better. It’s nothing like it was a year ago, but compared with a few months ago, we definitely see an improvement.”

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