[Noozhawk’s note: With this column, longtime Santa Barbara business writer Ray Estrada will begin providing regular business reports for Noozhawk readers. E-mail tips and questions to him at news@noozhawk.com.]
A year ago, many observers might have looked at downtown Santa Barbara’s empty storefronts along State Street and wondered when they would ever be filled again — especially in the wake of the nation’s worst economic downturn since the 1930s.
After the departure of more State Street businesses since mid-2009, however, Santa Barbara County’s premier retail district has seen a drop in triple-net leases to about $2 per square foot in some cases from more than $3. Although a recent walk through the area revealed more than a dozen storefronts showing little sign of life, a new crop of businesses is filling the gaps.
During the Memorial Day weekend, the G by GUESS clothing store, formerly Anchor Blue, quietly opened at 820 State St. A block away, another clothing and accessories retailer, Tilly’s, 917 State St., pushed closer to its opening later this month. Those two key storefronts in the heart of State Street took more than a year to fill.
Other encouraging signs after the last two years’ exodus include some smaller storefronts, such as the Morgan & Teach showroom at 1125 State St. The company manufactures custom wide-plank, exotic wood floors for residential and commercial buildings.
Morgan & Teach plans to move its manufacturing facility to the Central Coast from Oregon, bringing as many as a dozen jobs with it, said Marc Hyman, a company spokesman. He said the lower rents compelled the company to open a store where it will get a great deal of foot traffic.
Another storefront gap was filled with the recent opening of Cranky’s bike shop, 1014 State St., in a third of the space once occupied by Morninglory Music, which closed two years ago. Cranky’s took up half the space leased by Del Sol, a retailer of clothing that changes color in sunlight. Although it’s slowly moving out, Del Sol continues to operate until another tenant can be found.
After 40 years of business in the area, Open Air Bicycles abruptly closed May 27, just a few months after recently moving to 1303 State St. from its longtime location adjacent to the Santa Barbara train station off Lower State Street.
Meanwhile, in the 1200 block of State Street, two businesses opened in Victoria Court: Punch, an eclectic boutique and home furnishing shop, and the Arbor skate and snowboard store, which held its grand opening Saturday.
Also to open soon in the 1000 block is Crossroads Trading Co., which will buy, sell and trade recycled clothing. It joins a similar storefront business, The Closet, 920 State St., in the buying and selling of clothing. The Closet opened earlier this year.
Other interesting additions to the downtown district include La Tavola, a fine linen rental shop at 1102 State St.
With the earlier sale of the building now occupied by Borders bookstore at the corner of State and Canon Perdido streets, watch for some changes on the horizon. Earlier this year, Borders Group Inc. repaid a $42.5 million loan to the Pershing Square private equity firm and secured more access to credit, which gives the retailer much-needed breathing room. It has another large loan to repay next year.
Borders has lost market share to Barnes & Noble, which has a store in the next block at 829 State St. In Borders’ most recent quarter, which included the holidays, sales fell 14 percent at its superstores that have been open at least a year.
On May 27, Borders Group reported a sharp decline in sales, as consumers shifted to the electronic books offered by rivals, sending the shares of the No. 2 specialty U.S. bookseller down more than 8 percent. Borders is set to launch its own electronic bookstore this month.
Standard & Poor’s analyst Michael Souers has lowered his recommendation on Borders stock to sell from hold. He said the sales drop was worse than his projection and noted that it marked the seventh straight quarter of double-digit declines.
Moving down to the 700 block of State Street, the owners of California Crisp Café, 718 State St., have transformed the eatery into Kozmo’s, which has a full menu and $1 draft beer. Nearby, at the corner of State and De la Guerra streets, the former Left at Albuquerque restaurant site remains vacant at Paseo Nuevo.
Also remaining vacant is the 509 State St. site, which still promises to be a Brazilian restaurant someday.
At 435 State St., meanwhile, Whiskey Richards has remodeled its façade and interior bar. The saloon shut down earlier this year for the facelift.
Nearby, the India House opened recently at 418 State St., but shows little signs of bringing in much foot traffic, despite it 3 to 7 p.m. happy hour to rival next door’s drink specials at Sharkeez Baja Cantina, which has updated its menu. The Saigon Vietnamese Restaurant, 424-A State St., closed in May, but the proprietor still runs three other eateries with the same name in Santa Barbara: 318 N. Milpas St., 1230-A State St. and 3987-A State St.
Across the street is yet another diner-type restaurant called Billies, 413 State St.
At State and Yanonali streets, the relocated Bay Café is moving closer to opening soon. Across the street at the former Big Dog outlet store, 6 E. Yanonali St., Raoul Textile Studio plans to open this summer. It will showcase “hand-printed textiles and garden and home accessories,” according to its owners.
Looking to Upper State Street, meanwhile, the long-awaited Plow to Porch organic market opened recently at 3204 State St. Plow to Porch also delivers its produce, which is grown on the Central Coast.
— Noozhawk contributor Ray Estrada can be reached at news@noozhawk.com.