San Francisco's Retail Scene

[peanut gallery]

First the bad news. From SFGate:

Clothier Wilkes Bashford to lay off 18 workers
Phillip Matier, Andrew Ross
Wednesday, February 4, 2009

Wilkes Bashford, the Sutter Street clothier who set the style for a generation of San Francisco's movers and shakers, has become the victim of the town's latest fashion trend - layoffs.

Slumping sales have led Bashford to let 18 of his 97 employees go.

"Things are tight, there is no question about it," Bashford said Tuesday before heading out to his daily lunch at Le Central, where he frequently dines with his best customer, Willie Brown.

Can't say we didn't see the layoffs coming. Bashford, whose stores in San Francisco, Palo Alto, Mill Valley and Carmel specialize in suits that run as high as $4,000, sent out a letter to shoppers in October offering a $300 discount on purchases of $800.

Then the stupid news, from the same article above:

Apparel in peril: Times are tough, but not so tough that San Francisco can't reject new businesses - even politically correct ones.

American Apparel, the U.S. clothing outfit that pays its work force, mostly immigrant Latinos and Asian Americans, twice the federal minimum wage - plus health care and other benefits - is just too much of a chain operation for San Francisco's hip Mission District.

A year ago, American Apparel, which already has three stores in San Francisco, leased a storefront on Valencia Street near 20th Street. Public notices of the store's planned opening went up three weeks ago, and quick as a zipper, neighbors and community activists hit the phones and spammed the blogosphere with howls that American Apparel would destroy the edgy, boutique quality of their neighborhood.

"Valencia Street is a great experiment and a fragile and cool thing - and we don't want to blow it," said neighborhood showman and one-time mayoral candidate Chicken John.

Supervisor Bevan Dufty, whose district includes the store site, says he hasn't taken an official position on the battle because he doesn't want to be disqualified from voting on the permit should Thursday's Planning Commission vote be appealed to the board.

Dufty did, however, underscore his general support for the city's limits on chain stores, noting that his office has received 250 letters and e-mails opposed to American Apparel on Valencia, and just five in support.

Company spokesman Ryan Holiday said, "A lot of people say they really want us, and a lot say they hate us and want us to go back to L.A. with our immigrant employees."

Although the company recently sold anti-Proposition 8 "Legalize Gay" T-shirts, Dufty and others say this fight isn't about the company ethos.

Explains Dufty: "They are just saying it's not right for Valencia Street."

A street that the Planning Commission lists as having 24 vacant storefronts.

Read that last line again. I prefer (and try to support) small, local shops over chains whenever possible. But with so much vacancy and an economy in the dumper, this is nuts.

And finally, the worst news, also from SFGate:

Elephant Pharm abruptly closes its stores
Victoria Colliver, Chronicle Staff Writer
Wednesday, February 4, 2009

Elephant Pharm, a small Bay Area drugstore chain known for its holistic approach to health remedies, abruptly closed all three stores on Tuesday and announced plans to file for bankruptcy.

Based in Berkeley with stores also in Walnut Creek and San Rafael, Elephant Pharm employed a total of about 190 people, including at its home office. A Los Altos location, which opened about two years ago, closed in the fall.

The company, which offered traditional prescriptions along with Chinese herbs, yoga supplies and other alternative products, cited the downturn in the economy for its decision to liquidate under Chapter 7 of the U.S. Bankruptcy Code.

"The company has been burdened with obligations that were quite difficult for a company of our size to carry," Elephant Pharm's chief executive officer, Kathi Lentzsch, said in a statement.

Over the past year, Elephant Pharm continued discussions with potential investors, cut costs and closed the Los Altos store in an unsuccessful effort to avoid Tuesday's decision, the company said.

"The current management team and board of directors worked diligently to grow the company to a size that could bear these obligations," Lentzsch said, "but due to the current economic conditions and the tightening of the credit market, it has not been possible to raise the capital required to continue the business."

Elephant Pharm, which opened its first store in Berkeley in 2002, was founded by self-described serial entrepreneur Stuart Skorman, who also started Reel.com and the now defunct Hungryminds.com at the height of the dot-com boom. In 2005, Lentzsch took over as CEO from Skorman, who is no longer involved in the company.

In the fall of 2005, the company raised $26 million from Tudor Investment and the Bay Area Equity Funds. Giant drugstore chain CVS also has invested in Elephant Pharm.

Customer Keith Gatto made a pilgrimage to Elephant Pharm's Berkeley store Tuesday from his office on the UC Berkeley campus because he couldn't believe it was closing.

"The feel I got from Elephant Pharmacy was that they were looking out for you and your health. It wasn't a transaction-based environment," said Gatto, 44, who appreciated the company's support of both Western and alternative therapies.

Jude Valentine, a Berkeley resident, said she wasn't surprised by the store's closure because she noticed recently that the store's shelves were emptier and some products were out of stock.

"What was great about that place was there were consultants that anyone could see - reputable people with credentials," said Valentine, 72. "A lot of times you could see one of their practitioners before you could get an appointment to see your doctor."

Valentine, who did not know where she would take her pharmacy business, said she attended the store's wellness classes and considered it a community center. "And you could get a prescription filled, by the way," she said.

The president of Elephant Pharm's chief competitor, Pharmaca Integrative Pharmacy, said he was sorry to see Elephant Pharm go out of business.

"You always want competition in your space because it keeps you on your toes and lends credibility to the model," said Mark Panzer of the Boulder, Colo., company. Pharmaca has 23 stores in five states including 13 in California.

But Panzer didn't think Elephant Pharm's troubles signaled similar problems for his company. "Our execution - complementary, alternative medicine coupled with traditional pharmacy - has been a model that resonates with our customers," he said, adding that the stores continue to show positive sales growth.

On Elephant Pharm's Web site, the company left this message to its customers: "It's been a very special six years since we started this drugstore revolution, and we certainly couldn't have made it as far as we did without you - our customers. We hope that you will continue your pursuit of a good, long life, well lived."

My wife was in the San Rafael store just a few days ago and noticed the shelves were strangely bare. She asked if they were closing and the employee said no, they were just late in getting shipments. They might have been just saying that, but my guess is the employees didn't know this was coming either. We can get our prescriptions at other places, but they sold a lot of unique stuff we haven't found elsewhere.

[Gordo]

Too bad about Elephant Rx - I had only been to the Berkeley and Los Altos locations, but they did stock some pretty unique stuff and were generally just cool stores.

On the American Apparel BS -

[BTinSF]

Originally Posted by peanut gallery

That's the connotation that makes it a bad name. But assuming Phan actually has a good reason to name it this, the Tiangu legend of eating the Sun at least fits.

I think it's too clever by far. The average American is going to immediately focus on some kind of unfortunate Asians eating dog reference. That, coupled with the dubious Mission St. location, the partially unsold building and the lousy economy, and I'd say this place won't last long. But that's par for the course for these places opening in new condo buildings. They tend to be flashes in the pan (I still miss both the extraordinarily good Indian place that opened in my condo when it was new and the equally good Bruce Cost high end Chinese place that followed it). We'll see.

[peanut gallery]

Originally Posted by BTinSF

But that's par for the course for these places opening in new condo buildings. They tend to be flashes in the pan (I still miss both the extraordinarily good Indian place that opened in my condo when it was new and the equally good Bruce Cost high end Chinese place that followed it). We'll see.

On that note, Minna's new place in Millennium is starting to take shape. They've got the overhead lighting in place and you can see some of the wall treatments (mostly brick). Still looks like a construction site overall, though.

[peanut gallery]

They're not done yet, but the wraps have come off the space for the new Diesel store on Market:


I like what they've done on the ground floor, but I don't like the transition from the modern treatment on the second floor to the original windows on the upper floors:


An entry along Market:


I'm really looking forward to seeing what they have planned for the corner:


By the way, the inside has barely been started. So it's not like this will be opening any day now.

[BTinSF]

Sure seems to me like it's taking a very long time for what they did/are doing.

[Gordo]

It does seem to be taking forever.

I walked by this building earlier today, and pg's right, nothing has been touched inside. There's a huge hole down into the basement back by the southwest corner of the building - I'm curious to see what they do there.

[peanut gallery]

You're right about the time. Could they have been doing a lot of seismic work?

I agree, Gordo, it will be interesting to see what they do with that space.

[viewguysf]

Originally Posted by peanut gallery

You're right about the time. Could they have been doing a lot of seismic work?

I agree, Gordo, it will be interesting to see what they do with that space.

Maybe they just don't want to spend the money now to complete the project; after all, just how well would a new store perform today? It would cost a substantial amount not only to build out the store but also to furnish and stock it as well as commit to expensive labor costs that they currently don't have to shoulder.

[peanut gallery]

That's certainly a very reasonable approach at this point. But even from the beginning this has been a very slow process. Although they did gut the entire building, so it's not like they were simply building out a retail space.

[sofresh808]

^^Just in case you missed this gem from the AA protest.

Flicker Gretchen Rosinette

[yakumoto]

Originally Posted by sofresh808

^^Just in case you missed this gem from the AA protest.

Flicker Gretchen Rosinette

Oh, I don't see how those two can keep a straight face...

[San Frangelino]

Whole Foods in the Castro District by 2011
http://2001marketsf.com/

[BTinSF]

Friday, February 6, 2009
Retailers delay opening new stores
San Francisco Business Times - by Blanca Torres

Three years ago retailers couldn’t open stores fast enough. Now those companies are taking a harder look at where they open a new store, if at all.

Whole Foods Markets expects to go forward with the eight Bay Area stores it has in development — it will just take longer than originally planned.

Glen Moon, Whole Foods vice president of development for Northern California, said some of the company’s lease agreements provide flexibility on when they will open stores, such as a vacant site in Lafayette. That property was expected to open in 2009, but will now open in 2010. Whole Foods also plans to add a store in Dublin that will anchor a shopping center called The Green still under construction. The site, developed by Blake Hunt Ventures, was expected to open in 2010, but will likely come online in 2011.

“We just reevaluated our opening dates,” Moon said. “In the past, we opened stores too close together. ... That’s a lot of stress.”

Tesco, a global grocery chain that runs Fresh & Easy, announced 18 Bay Area locations last year it planned to open in 2009, but none has come online, and the chain’s timeline is undetermined.

“It’s important to be prudent in our expansion,” said Brendan Wonnacott, a Fresh & Easy spokesman.

Another example is the former Target store in El Cerrito, steps from a BART station, which has been vacant for six months after the retailer abandoned plans to remodel it. Target, which bought the property from the city’s redevelopment agency, has asked to extend its agreement so it can find a tenant or buyer.

“We invested a lot to have this site assembled and now we’re stuck with an empty building,” said Lori Trevino, El Cerrito’s redevelopment manager.

Tenants have an advantage in the market, but retailers are weighing their options, said Nina Gruen of San Francisco-based Gruen + Gruen Associates, a retail consulting firm. In the last six months, the firm has seen an uptick in retailers commissioning market research reports.

“Retailers have become relatively cautious, and that means they will probably do a smarter move,” she said. “They are more concerned about asking, ‘Is this the right market for me?’”


[email protected] / (415) 288-4960

Source: http://sanfrancisco.bizjournals.com/...ml?t=printable

[BTinSF]

I enjoy the snarky attitude at Curbed SF sometimes. Here's their take on the American Apparel saga:

Store-punting: Nope on American Apparel in the Mish
"At the end of the day, they (American Apparel) definitely screwed up," said a planning commissioner. And shortly after, the commission voted unanimously against allowing cool kids chain American Apparel into 988 Valencia St., citing both the company's failure to connect with the community and the Mission's collective smackdown of the store. There's never been a flood of emails and speakers quite like this one, and the commission heard the village loud and clear. Missionites, for the most part, left their pitchforks at home, and often even spoke brightly of their affinity for the brand— just not in their "delicate flower" of a neighborhood, where coffee roasters and struggling artists work, hands clasped together, to "bring to fruition their dreams." And just before a round of kumbaya broke out— one commissioner seemed to almost choke up over talk of gentrification on Valencia— everyone agreed that American Apparel was quite the stand-up company, but they'd rather BART to Union Square to get their tees, thx. And the crowd went wild.

Source: http://sf.curbed.com/

Ah, the "delicate flower" of Valencia St..

[hi123]

Whole foods is also set to replace Bell Market on 24th street in Noe come february.

[Gordo]

Originally Posted by BTinSF

I enjoy the snarky attitude at Curbed SF sometimes. Here's their take on the American Apparel saga:


Source: http://sf.curbed.com/

Ah, the "delicate flower" of Valencia St..

All of that banter started in the comments section of this post:

http://sf.curbed.com/archives/2009/0...eader_comments

It's got several posts from "Bree"

[peanut gallery]

I read that earlier today. Those Bree posts were hilarious.

[viewguysf]

Originally Posted by hi123

Whole foods is also set to replace Bell Market on 24th street in Noe come february.

That will be a huge improvement that I'm definitely looking forward to, as well as to the one on at Market and Dolores. I hope that they both make it and don't get hung up in the economic mess, etc., etc.

[BTinSF]

Mission residents reject American Apparel
C.W. Nevius
Saturday, February 7, 2009

Congratulations to the residents of Valencia Street. After a rowdy and sometimes misleading campaign, they managed to stop American Apparel - a socially conscious, popular, American-run clothing store - from moving into one of the street's vacant storefronts.

The hoot, of course, is that many of the vociferous opponents of the store admit that they buy and wear American Apparel clothing. Some of them wore it to the City Planning Commission meeting to argue against the store opening in their neighborhood.

"Everyone I know is wearing an American Apparel T-shirt right now," said Chicken John Rinaldi, one of the protest organizers. "I wear one every day."

It's another through-the-looking-glass moment in San Francisco. They love the product but hate the store solely because there are about 260 of them worldwide. That means it's a chain and unwelcome under any circumstances.

By a 7-0 vote - including staunch Republican Michael Antonini - the Planning Commission refused to grant the company a conditional use permit.

This only reinforces San Francisco's reputation as America's squeaky-wheel city. If you can get 200 people together and persuade them to show up at a meeting and raise a fuss, you can stop damn near anything in this town. At some point, someone is going to have to stand up and say we've had enough of government dominated by small groups of shouting people.

I am not holding my breath.

"I'm scratching my head on this one," said Steve Adams, president of the Merchants of Upper Market and Castro. "There was all this opposition to American Apparel, saying that you need to be socially conscious. Well, they are. They pay their workers more, they have a health plan and they opposed Prop. 8. I'm still trying to figure this one out."

Opponents see it all in black and white. At Thursday night's Planning Commission meeting, public comment on American Apparel ran for about three hours. They railed against retail chain stores as if they were polyester golf pants. One called it "the beginning of the end of Valencia Street," and another warned ominously of allowing "these parasitic entities to come in."

And you thought it was just a T-shirt store with tacky ad campaigns.

Many opponents offered up the same argument: that the minute American Apparel moved in, local businesses would be forced to close and a flood of chain stores would swamp the neighborhood.

Uh, actually, that's not right.

In 2006, voters passed Proposition G, which states that before a chain store can move into a neighborhood, it is required to apply for a conditional use permit before the Planning Commission.

"A lot of energy went into this," said Supervisor Bevan Dufty, who opposed American Apparel. "But I think the 7-0 vote shows that this tool works."

I don't have any quibble with requiring American Apparel to seek out a special permit. My complaint is that Prop. G is being used as a bludgeon instead of a scalpel. If a socially conscious chain store whose clothes are already wildly popular in a neighborhood wanted to move in, you would think that would be fine.

Now, if it were a Wal-Mart or, as Adams says, something that was already well represented, it should be turned down. It's happened elsewhere.

"One thing we said no to was a porn supermarket," he said. "C'mon, it's the Castro. We've already got enough of them."

Admittedly, American Apparel totally blew its rollout in the neighborhood. More than one civic leader warned the company that it needed to do an enormous amount of community outreach, with Dufty leading the way. Instead, company officials basically announced they were moving in and left the neighbors to deal with it.

"I met with them and gave them 10 things I thought they should do," Dufty said. "The reality is they have done none of those things."

In contrast, take the case of Levi's, which wanted to open an outlet on Castro Street. Working through Dufty, the company met with merchants, explained their plans and even pointed out that they wouldn't undercut competitors - products sold in the Levi's store cost as much as $10 more than in mom-and-pop stores.

The result? Levi's conditional use permit passed - there was not a single dissenting vote.

So, if American Apparel had done all that, would it now be setting up shop on Valencia? Probably not. Valencia is one politically active street.

"The deal is, we are not going to allow a chain store to come in here," Rinaldi said. "Never. No way. End of story."

Even if the store makes perfect sense?

I guess that's what you get when you leave city policy to a guy who calls himself "Chicken."

C.W. Nevius' column runs Tuesday, Thursday and Saturday. E-mail him at [email protected].

http://sfgate.com/cgi-bin/article.cg...MN6M15P43V.DTL