Rough ride for cart vendors turned to profits
THIRD STREET PROMENADE — Surrounded by some of the biggest names in retail, shopper Valerie Cisneros has options. If she feels like it, she can hit Urban Outfitters, The Gap and Victoria Secret in one fell purchasing swoop.
But she isn’t. Instead, Cisneros is fascinated by the merchandise displayed on a green retail cart along the Third Street Promenade that touted a wide selection of belt buckles, displaying everything from green dollar signs to American flags... even one with the name of her brother, Jesus.
Those are items Cisneros can’t find at any major retailer. For Cisneros, the carts are where it’s at.
“I like shopping here instead of the bigger stores,” she said as she looked over a buckle decorated with glimmering rhinestones.
“I LIKE SHOPPING HERE INSTEAD OF THE BIGGER STORES.” — Valerie Cisneros SHOPPER
“You find things you just can’t get anywhere else. It’s cheaper, and you get a little satisfaction knowing that you are helping out a small business and not one of these giant, mega stores.
“It kind of takes you back to the era when we had swap meets, like, every weekend and you could find some funky, fun stuff.”
Shoppers like Cisneros are exactly the kind of clientele city officials envisioned when they awarded a 10-year contract (with a five-year extension) to Provenzano Resources Inc. (PRI) to take over the cart program and renovate it to attract more customers, enhance the appearance of the promenade and increase revenue for the vendors and, in turn, City Hall, which receives a portion of the profits.
“The new carts are great,” said Miriam Mack, economic development director for City Hall. “They are good-looking carts, the merchandise is varied and attractive, and they add to what is already available. I think the program does enhance the prestige of the promenade.”
PRI replaced Promenade Services Inc., the group that had managed the promenade’s mobile cart operations since 1989. City officials and the Bayside District Corp. — a nonprofit group of business leaders who help manage downtown along with City Hall — felt it was time to explore new vendors who could present better concepts or approaches that would make it more profitable for the promenade.
At first, many of the old vendors resisted the change and lobbied the City Council to back out of the contract with PRI. They complained that the company was charging too much for rent and would require vendors to invest too much money up front, with no guarantee that they could stay around long enough to recoup their investment.
A staff report released last year said negotiated base rents averaged $2,461 per month. However, PRI also collects 15 percent of any revenue operators generate above that base rent.
Likewise, City Hall’s new contract calls for a minimum $600 rent from each cart operator, or 30 percent of what PRI collects, whichever is higher, according to City Hall’s contract with PRI. City Hall expected to collect an average of $720 per month from each cart, based on the financial expectations each cart should generate.
Some vendors complained that PRI would no longer employ the homeless to help move the carts every day. Instead, PRI uses a cart driven by one employee to collect the carts and tow them to a storage space in the evening and then back out on the promenade in the morning.
Deborah Kravitz, an executive with PRI, said the company did hire three homeless men at the beginning of the program, but two were unreliable, with one stealing merchandise from the carts.
Other vendors tried to outbid PRI for the contract, but were unsuccessful.
“We tried to make the transition as smooth as possible, but we can’t accommodate everyone,” Kravitz said. “Five former vendors were offered locations in our program and are still with us to this day. Five out of 17 of our vendors are from the previous cart program.”
With any business, there are growing pains and Kravitz acknowledges that, as does Mack and some of the vendors, who had concerns initially with the design and size of the carts, the new rents and the $150 fines received for opening their carts late and closing early.
“When I first opened up, business was not great,” said Debbie Perry, who operates Fancy Paw, a clothing company for pets. “But in the last six months, things have finally turned around. People know about me and are coming from many different places. Whenever they’re in town they stop by. I have customers from overseas now and they call me up and order outfits for their pets.”
Perry, who operates a different kind of cart at the Farmers’ Market in Los Angeles, said the promenade is a great place for her to set up shop because it’s an open-air mall with many people who like to walk their dogs while they shop. This has helped her become profitable, but she said other vendors haven’t been so lucky.
“It really depends on the merchandise you have,” said Perry, who works at her cart every day of the week, roughly 12 hours a day. “My rent is very expensive, around $3,000 a month, but when you look at other places, that’s really how the market is now. So, you either have to have multiple carts or a really good product to be successful.”
Many vendors have problems with the size of the carts, wishing they were a little bigger so they could display more merchandise, but overall, most seem pleased with PRI.
In addition to being “fair” and “responsive” to complaints, PRI, one of the largest cart operators in the country, also offers consulting services to help with marketing products. PRI staff also work with vendors to make sure they have quality products people want to buy and are not similar to those sold in stores along the promenade.
“I wish the carts could be stationary because when you move them, things can break,” said Nicole Delecce of Bliss, which sells trendy jewelry. “That said, Provenzano has been a great resource for us. I can’t say enough good things about them. They are on top of things. If we have problems, they fix it right away. They are organized and really nice people to work with.”
Delecce said since she moved to the last block of the promenade, near Wilshire Boulevard — often considered one of the least traveled areas of the shopping district — she has seen her sales soar. She believes it is because of the promotion done by PRI and the products she sells that have increased foot traffic in the area.
“We had a chance to move to the second block, but I think we are going to stay right where we are,” Delecce said.
Kravitz is confident that when food carts come online later this year, the promenade will be an even more attractive venue for shoppers. The plan is to have five food carts selling everything from gourmet cookies and hot dogs to churros and other familiar favorites.
“It’s been an interesting year,” Kravitz said,“and we are looking forward to the next 14.”
“IT’S BEEN AN INTERESTING YEAR, AND WE ARE LOOKING FORWARD TO THE NEXT 14.” — Deborah Kravitz Executive with Provenzano Resources Inc
Originally published in the Santa Monica Daily Press print edition on January 5, 2007. Read the original PDF.