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State Street's makeover: National chains grab retail locations
Pacific Coast Business Times
Barbara Pearson
July 21, 2006

The face of State Street is almost unrecognizable to one who hasn't visited in a few months.

National retailers have been leasing up space in Santa Barbara like it's going out of style. With the retail vacancy rate below 1 percent, according to Radius Group Commercial Real Estate, space along the State Street corridor remains a hot commodity.

On July 14, American Apparel became the most recent store to open its doors. The Los Angeles-based clothing manufacturer targets a younger demographic, with a rainbow of retro-inspired basics. But the store is just one in a flood of recent openings along the State Street corridor.

"We did over $7,900 in sales over our opening weekend, and hope to boost sales even more with the August launch of our 15 percent off back to school discount, as students return to town from their Summer vacation," said Carolyn Barron, a representative of American Apparel. The store also offers a 10 percent discount to customers that work on State Street.

According to Erin Gray, the district manager that was on location for American Apparel's grand opening, visitors were ready for the store even before it opened. "As far as while we were getting the store set up, there were people trying to come into the store and shop every five minutes, so we knew we had something good," she said.

The week before, Juicy Couture opened at 803 State St., completely unrecognizable from the site's former life as Southwestern cuisine restaurant, Left at Albuquerque, which moved to a new location down the street.

Upon this reporter's first visit to the site, two young women were having their picture taken in front of the Juicy doors. One admitted she was "obsessed" with Juicy, donning the Juicy clothing and accessories, and the other—an Australian—said she was celebrating her first visit to a Juicy retail location.

"Santa Barbara retail asking rates have continued to rise as high visibility locations on State Street have come on the market, some asking as much as $4.50 per square foot gross," said Brian Johnson of Radius Group.

Just a few days prior to that, Rip Curl, a surf/skate retailer, had its grand opening. Design Within Reach opened on June 6. "Things have been good as far as foot traffic and the overall respons—we can't complain by any means," Manager Jim Huff said. Ann Taylor Loft also opened in Paseo Nuevo on June 6.

Levi's opened at 611 State St. on May 15. While Store Manager Euliza Mahinan said foot traffic is not as busy as she would like, she said that sales are good in comparison to the other recently opened Levis' stores. The retailer is also giving the store an independent feel by customizing marketing to local events, such as offering a sale during the Summer Solstice festivities.

In March, Michael Stars opened its doors right next door. The opening was followed with a grand opening party on May 19. "We are satisfied with our store performance to date and look forward to much success on State Street," said Jennifer Castro, director of retail for Michael Stars.

PacSun, another surf/skate brand, which opened in Paseo Nuevo in the beginning of December, is still showing signs of improvement. An assistant manager at the store said that while sales started out well because of the retailer's notoriety in La Cumbre Shopping Center, the influx of national retail neighbors has boosted foot traffic even more.

The future location of Sephora in Paseo Nuevo has storefront banners that advertise a Fall 2006 opening. At 625 State St., Volcom paper lines the windows, advertising the coming of yet another surf/skate retailer to the beach town corridor.

"This has been the tightest segment of our local market and it will continue to be very challenging for retailers to find the right space in Santa Barbara," stated a second quarter 2006 report from Leider Hayes Commercial Real Estate. "However, over the past 18 months, there has been a noticeable increase in the amount of available space, which may help ease the pressure on rates."
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