National retailer looks for niche by the beach
DOWNTOWN — A popular retailer of outdoor gear will replace the Toys “R” Us that once occupied the corner of Santa Monica Boulevard and Fourth Street.
Recreational Equipment Inc. (REI) — the nation’s largest retail cooperative selling outdoor equipment and clothing — announced plans on Tuesday to open a new store in spring of 2006 at 402 Santa Monica Blvd.
The two-story, 32,000-square-foot store will employ approximately 60 full-and part-time staff, company representatives said. REI will provide outdoor equipment and clothing for camping, climbing, cycling, hiking, kayaking, travel and snow sports, including top brands and its own line of products.
Founded in 1938 in Seattle, REI opened its first store in the Los Angeles area in 1977. The Santa Monica location will be REI’s seventh store in the region.
REI’s closest retail location is currently in Manhattan Beach. The company opened a store in Huntington Beach in August.
Rob York, a retail consultant for the Bayside Business District, the nonprofit group that manages downtown with City Hall, said REI had less exposure in the past due to its operators’ unwillingness to pay market values for good locations.
However, York said REI’s move to occupy the Toys “R” Us site shows company leaders are willing to invest more in their business.
“They are a great retailer and attract a good demographic,” York said. “They are trying to be more prominent, and the stars have aligned so now they can pay market rent for a great market location.”
REI representatives wouldn’t discuss any aspects related to their leasing agreement.
Santa Monica real estate brokers have said commercial real estate in the downtown area commands up to $12 per square foot.
Toys “R” Us closed its doors in April. The 52,423-square-foot building was acquired by CIM Group through its CIM Urban Real Estate Fund.
The total transaction was valued at more than $30 million, and CIM paid about $24 million for the building, according to the Los Angeles Business Journal. Planet Action, located at the Toys “R” Us property, continues to operate its 8,640-square-foot space.
CIM has invested in Santa Monica since 1993 and developed many prominent properties along Third Street.
Greg Mellinger, REI director for the company’s Southern California and Arizona operations, said he is excited REI will have an outlet in Santa Monica because there is a great potential for the company’s products.
“The reason we’re in town is because Santa Monica has an incredibly active community with plenty of access to the outdoors,” Mellinger said.
There are approximately 125,000 REI members who live within 15 miles of the new Santa Monica location. They currently purchase their products online or commute to the Manhattan Beach store to shop, Mellinger said.
Members pay a one-time $15 fee and receive a share in the company’s profits through an annual refund based on their purchases. Members also can vote for the company’s leadership and receive exclusive deals on used products for sale.
REI spokesman Mike Foley said the Santa Monica location will require some renovation, which may take until May to complete.
REI has filed for a plan check for interior modifications to the former Toys “R” Us space, according to City Hall’s plan-ning department. In addition, the company has filed for Architectural Review Board (ARB) approval for exterior modifications to the building.
The plan check is still being processed, and the proposed exterior modifications have not yet been approved by the ARB. These are the only reviews required for REI to occupy the former Toys “R” Us space, according to the planning department.
REI is known for employees who help select the right gear and offer information and tips to customers on how to achieve a great outdoor experience, Foley said.
A camp stove demonstration table and a footwear test trail will be among the in-store features that allow customers to test the products.
A gear rental department also will encourage customers to try new outdoor activities.
Mellinger said there has been no recent change in REI’s business plan that prompted it to move to Santa Monica. However, he noted that with so many members living in the general vicinity of REI’s new location, a shop in Santa Monica may have been overdue.
Mellinger said REI tends to complement its retail competitors, which include bike stores and other outdoor shops.
One area with which REI continues to be concerned is the video-game market.
“We kind of see Play Station and the television as our competitor,” Mellinger said. “We’re trying to get more youth and people outdoors, because once they’re outdoors and enjoy it, they will become users.
“All they need is an introduction.”
Originally published in the Santa Monica Daily Press print edition on October 5, 2005. Read the original PDF.