Do Boutique Retailers Leave DTLA More Exposed to Economic Pressures?

Downtown Los Angeles could be uniquely exposed to the economic impacts of the pandemic due to its high concentration of boutique retailers and mom-and-pop restaurants. These independent retailers are most exposed to the economic pressures brought on by the pandemic, which include mandated closures, limited capacity and health and safety guidelines. However, Nick Griffin of the DCBID says that independent retailers are also better able to adjust to new market conditions than large chains.

“I think that you could make the case in either direction,” Griffin, executive director at the DCBID, tells GlobeSt.com. “I would argue that a diverse ecosystem of small businesses has a level of resilience and flexibility that larger chains often don’t have. We have had several new businesses open during this time, and they are doing well. I have also been really gratified to witness how innovative and resilient those small businesses are. They are able to see what is happening and shift their model as they need to or scale up and scale down. It is really a testament to the importance of those small businesses.”

While these businesses have done a good job of adjusting and driving business during the pandemic—even in the face of significant challenges—the DCBID is dedicating tremendous resources to help see these businesses through. This includes its DTLA Recovery Compass program, a bi-weekly survey that delivers data to local businesses to help them respond to market demand and needs. “It is a very difficult time for small businesses, and we are dedicating a huge amount of efforts to small businesses. They are the lifeblood and the unique special sauce of Downtown Los Angeles, and they are the most at risk on some ways,” says Griffin. “We are putting a huge amount of effort into supporting them.”

Landlords are also playing an integral role in helping small businesses survive this economic upset. “Landlords have really stepped up in recognition of the struggles that businesses are having and in recognition of the role that they play in the success of small businesses,” says Griffin. “They are shifting with the environment, including things like shifting to a percentage lease or deferring rent or a number of different things.”

Like small businesses, landlords—many of which are small operators in their own right—are also getting creative to cope with revenue loss through the pandemic. “Landlords have also gotten very innovative, and it is in their best interest because a bird in the hand is worth two in the bush,” says Griffin. “It is much better to help an existing tenant weather the storm as opposed to have to try to find a new tenant in the middle of the pandemic. I think that landlords have recognized that it is in their best interest to support existing tenants.”