Downtown Seattle retailers struggling, vacancy rate up

When Trudy Rosemarin lost seven corporate accounts during one week in February, she worried that her decade-old floral business would become another vacant storefront in downtown Seattle.

Sales at Trudy's Floral Design were down 50 percent through the winter, and she has let go two of her four workers.

Rosemarin says she still has loyal customers, people who "see the empty storefronts" and don't want to lose another downtown business.

The departures include Rue Boutique on Stewart Street, Indulgence Spa Salon on Third Avenue and a string of closures on First Avenue, including Polite Society, Tulip, Urchin and the bathroom supply shop Waterworks, where a sink sits askew on the vacated showroom floor.

In the same building as Trudy's — the Medical Dental Building, which is a block from Westlake Center — mannequins have stood for months in the window of the former tbc boutique, with signs around their necks pointing to its sister location, Sway & Cake, around the corner.

Downtown retail-vacancy rates are not outlandish, particularly compared to suburban malls that have been hammered by the loss of big stores like Circuit City, Linens 'n Things and the outdoor and sports chain Joe's.

In downtown Seattle, retail vacancies are 5.4 percent — or about 293,000 square feet — up from 3.4 percent a year ago, according to the Commercial Brokers Association.

Rents are up a bit — to $31.80 a square foot, from $31.50 last year — but that's not true throughout downtown, real-estate brokers say.

The heart of downtown shopping remains strong, although anchors like Nordstrom continue to post profit drops and Macy's closed its regional office in Seattle last year.

There are also empty spaces in the core, including the closed Adidas Sport Performance Store on Fifth Avenue and the hole at Second Avenue and Pine Street where a hotel and condo project has been stalled for more than a year.

Most of the vacant space is outside the several-block area that's easily walkable from the parking garage at Pacific Place. That urban mall and its parking were part of a 1990s revitalization of downtown that cost about $400 million and included Nordstrom moving into the old Frederick & Nelson building and reopening Pine Street to traffic.

"We were known as a 10-hour city; now we're known as an 18-hour city," said Susie Detmer, senior director of retail services for Washington at the real-estate brokerage Cushman & Wakefield.

The recession could benefit big downtown retailers if people who used to shop at Linens 'n Things or Joe's near home take their business to Bed Bath & Beyond or the new Columbia Sportswear downtown, she said.

The independently owned stores, which operate mostly outside the retail core, feel the economic sting more acutely.

Rents are down 30 percent in some areas outside the main shopping district along Pine and Pike streets, Detmer said. "If you are not in a bull's-eye location, those retailers seem to be having more of a struggle."

That phenomenon can hurt a city that relies on having people shop downtown even if they don't live there, said Richard Ettenson, associate professor of global marketing at the Thunderbird School of Global Management in Phoenix.

"Downtowns have the extra burden — unless there's a thriving residential community — of having people visit and shop and spend money there," he said. "If the spillover shops are not doing well, it may send a signal that downtown is not doing well."

Many retailers outside the Pine and Pike corridor are clamoring for lower rents, including Victoria Gentry, who owns Vain on First Avenue. Her salon sales are solid but not growing like they used to, and her boutique sales are down. By making money at all, she is a winner in today's retail climate.

When other retailers ask how she's faring, Gentry said, "I almost don't want to say 'good,' because I don't want to be bragging."

On a recent trip to buy pricing tape, the first three supply stores Gentry tried were out of business. "If the people who sell us things we need to price our merchandise are gone, that tells you a lot," she said.

Lower rents outside the Pine and Pike corridor have attracted some new businesses, including Driftwood Consignment, which opened on Stewart Street last month.

"It's a risk we almost couldn't afford not to take," Natalie Anderson said of opening her second shop earlier than expected because of the lower rent. Her first store in Madrona is benefiting from the recession-borne popularity of used clothing, which in boutique terms can mean a $198 cardigan from Chanel.

The newcomers do not make as big an impression on longtime downtown retailers like Rosemarin as the businesses that have left.

"A lot of people really get that we have to support local shops, or we're going to go away," the florist said. "They see the empty storefronts."

— Melissa Allison

Gene Juarez Salons & Spas plans to open a new location at South Hill Mall in Puyallup in late June. At 6,100 square feet, it's more than twice as big as the current location, which remains open through June 27. — AM

Also at South Hill, Romy has opened a new women's clothing store. And on May 30, Zumiez launches its ninth-annual Couch Tour, celebrating professional skateboarding and music. — AM

A reusable bag campaign kicked off this week from the city of Seattle, the Seattle Chamber and local retailers. The ongoing effort will include signs in parking lots and store workers wearing buttons that remind people to bring their bags. — MA

The Pro Shop opens a store at Pacific Place in downtown Seattle next month, carrying Seahawks and Sounders FC merchandise. It will be on the third floor next to Benetton, in space previously occupied by Ann Taylor, which moved to a different part of the mall. — AM

Ballard Camera is closing after 61 years in business. Bruce Cozens, who took ownership in 2000, told King 5 News the popularity of digital photography hurt the photo-printing part of the business, then the recession hit and made things worse. A going-out-of-business sale runs through the end of June. — AM

The second annual Seattle Wine Awards tasting is June 14 from 4 to 7 p.m. at the Rainier Club. For $85 admission, attendees can taste award-winning Washington wines and meet the panel of local professionals that chose the winners. The panel includes sommelier Lisa Rongren from The Herbfarm and Salty's director of wine Tim O'Brien. Registration is at www.seattlewineawards.com. — MA

Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com