Entertainment concepts are transforming the Los Angeles retail market. According to a recent report from JLL, retail tenants from 2005 to 2009 were largely apparel boutiques. Today, apparel retailers make up only 36% of the total category, while restaurants, entertainment and fitness are the majority of tenants today. Bowlero, Dave and Busters, AMC and GameWorks are among the fastest expanding retailers.
"Entertainment is driving our industry forward in two ways. While true entertainment concepts are one of the darling categories of today, entertainment is becoming integrated into almost every facet of the retail experience," Benjie Baker, VP at JLL, tells GlobeSt.com. "Restaurants continue to move toward open-kitchens and restaurant as theatre."
The retail market has also adapted to the demand for entertainment-forward concepts. "Retailers concern themselves with guest relations these days, not customer service. Overall, the pure entertainment retail concepts are bringing a much-needed vivacity and intrigue back into the L.A. retail market that is struggling to adapt to an omni-channel world," says Baker. "While the process of selling goods may be changing, people will always want to be entertained."
These retailers are not only driving retail leasing, they are also absorbing the big-box space left behind by shuttering brands, like Sears and Kmart. "Back-filling big boxes can be a homerun for entertainment concepts," says Baker. "Many need a basic rectangular shape in order to operate and taking a big box is fitting a rectangular peg in a rectangular hole. However, many entertainment operators need a much smaller footprint and those big boxes are just that; too big. Landlords and owners will need to critically look at their budgets because the creativity needed to carve up a box in a manner functional for several retailers also takes creativity and patience on the economic side."
Overall, these concepts are looking, largely, for a deal in terms of location and storefront style. "Entertainment concepts walk the balance between proven real estate locations with high costs associated and emerging spaces that are economical," says Baker. "While some flock to former warehouse and industrial locations like the Arts District downtown, other more well-capitalized entertainment operators are popping in shopping centers or in-fill locations; anywhere they can ease their debut by leveraging co-tenancy or foot traffic. That is why growth is scattered across the city, from Hollywood to Century City to DTLA. People will seek out entertainment concepts but that does not detract from having a location resonant with your target demographic and overall brand."
This trend is just one example of the evolution of retail, which Baker says is necessary to the future success of the market. "Turnover allows for new concepts to try their hand," says Baker. "If anything, with the short attention span of today and the desire for what is new and exciting, replacing a retail concept that was relevant five, 10, or 20 years ago with an entertainment concept exemplifies the larger state of our industry."
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Kelsi Maree Borland
