Subtitle: A Changing Retail Landscape and Pandemic Consequences Lead to Fred Segal’s California Store Closures
The historic retailer, Fred Segal, known for its many transformations over the decades, has shut down the last of its five California based stores, retaining a single retail location in Resorts World, Las Vegas.
In the previous year, Jeff Lotman, the CEO of Global Icons, a Los Angeles business that held the global master license for the Fred Segal brand, expressed plans to open new outlets in Miami and New York while considering China as another retail market. However, this year, contrary to these plans, two stores in Southern California, which had opened barely a year ago, were closed. These included venues on Montana Avenue in Santa Monica and at The Shops at Sportsmen’s Lodge in Studio City. Among the numerous closures, a newly opened store located in Marin Country Mart, Larkspur, a Malibu store, and a flagship outlet on Sunset Boulevard in West Hollywood were also closed serving as the end of an era.
In explanation of these decisions, Lotman disclosed that the difficulties of retail in the current environment and the impact of the COVID-19 pandemic were significant factors. “The shift to online shopping, economic uncertainties and decreased foot traffic have made it difficult to maintain physical store operations,” he stated.
Larry Russ, the attorney representing the Segal family, stated that the company faced numerous obstacles. “The objective was Jeff would manufacture his own Fred Segal products and have them in the stores to have a bigger margin, which is needed to sustain yourself in the retail world, particularly with a multibrand store,” said Russ. “Jeff never had any manufacturing experience, and it was a challenge.”
Russ further opined that whilst Lotman was busy licencing the brand overseas, he failed to focus on his retail outlets in the U.S. Russ added, “The Sunset Boulevard location was not ideal. It is hard to get to and is huge. It would have been better to locate it somewhere else. It was a very expensive property. But the Malibu store was doing OK.”
Amid declining sales, it was decided by Lotman to return the Fred Segal worldwide master license to the family. However, he could have continued operating the stores for another six months, Russ mentioned.
Earlier this year, a Fred Segal Home furniture and accessories showroom was opened under a sublicense at the HD Buttercup Design Center in Culver City, California. This 4,000-square-foot showroom will continue to function and may replace the former Fred Segal Malibu location. Several companies are currently in negotiations with the prospect of obtaining the brand license or purchasing it. “I am already involved in extensive discussions with various parties around the world,” said Russ.
The Fred Segal brand, founded in Los Angeles in 1961 by the legendary retailer Fred Segal, has seen numerous shifts since its inception. Segal, who died at the age of 87 in 2021, was a visionary incubating a retail world whose merchandise blended contemporary styles with emerging brands, especially in denim.
Segal initiated his venture with a 350-square-foot store on Santa Monica Boulevard, pioneering a unique shop-in-shop concept and experiential retail on Melrose Avenue. He established prominence with the introduction of budding brands synonymous with the SoCal style like Juicy Couture, Hard Candy Cosmetics, and Earl Jeans. Jeff Lotman entered the fray in 2010 when he obtained the brand’s global master license and gradually expanded the retail business, accommodating transient pop-up stores in his flagship space cooperatively with trendsetting brands. One of those collaborations was a pop-up launched two years ago with the German brand Bogner, which created a Swiss chalet showcasing its fashionable skiwear in a space aptly titled “Ski Sunset.”