admin It doesn’t matter how many bankruptcies and closures we’ve seen over the last few years — when a genuinely cool, widely beloved brand or retailer calls it quits, it still stings.
The latest is LCD, a multi-brand specialty store in Los Angeles known for its fun, thoughtful mix of independent designers. It was an early supporter of brands like Sandy Liang, Collina Strada and Rejina Pyo, and the go-to for cool, in-the-know fashion girls in L.A. In a world without Barneys, Opening Ceremony, Bird or Shop Super Street, to name a few, its closure underscores the near-extinction of independent designer fashion retail in Los Angeles.
Geraldine Chung started LCD in 2012 as an online boutique after leaving New York and her job running digital at Atlantic Records.
“There was definitely a level of naïveté that went into this whole process,” she tells Fashionista. “I didn’t really do any market research. I didn’t really have a business plan. And I had never worked in fashion.”
Initially, Chung feared taking the leap into brick-and-mortar and avoided making any hires in the first two years. “Then, I realized, working with young and emerging designers, it’s just too hard when you’re trying to convince people to buy a quality product online without them being able to try it on and feel the fabrics,” she says. Chung recalls a piece of advice given to her by jewelry designer Anita Ko: “Scared money never wins.” So, she went for it, opening LCD’s first physical location in 2016 in Venice.
“Right away, I knew that that was the right move,” she says. “People were coming into the store, they got to try clothes on, they got to talk to the staff. It just became like a really magical neighborhood experience. The space was so cute, and I just love retail. Honestly, all my friends who are also retailers, we just call ourselves masochists, because it’s so painful, but it’s also just really addictive.” The next year, LCD opened a second location in Downtown Los Angeles.
Chung never raised money, she says: “The company has always been basically borrowing money from my parents, from my family, and draining my savings.”
Things were going smoothly until Covid hit in 2020. Like many small business owners, she fought hard to keep the lights on: “I basically didn’t sleep for the first six months… I would just be up all night finding, researching grants and trying to figure out what were the rules, when can we open, how do we open, how do I keep my staff paid? I applied for every grant that I could find, honestly — every small business (grant), every minority grant, every woman-owned grant.”
It ultimately paid off. She won the CFDA’s A Common Thread grant and received two rounds of PPP loans that would be forgiven as long as she kept staff employed. She also took out a large EIDL disaster loan.
Still, all the stress took a toll on Chung’s health: “I ended up getting stomach issues and developing gluten intolerance. I think I gained 20 pounds. I was so stressed out, I became pre-diabetic.”
At the end of 2020, she closed LCD’s Downtown L.A. location and used some of the financial assistance she’d amassed to move into a larger Venice location. By early 2022, it started to look like LCD was out of the woods.
“People were just going bananas. Everything really opened up once we had the vaccines,” she says. “There was such a community of people, especially throughout Covid, that were coming by and checking in on us and trying to buy at least a little something just to keep us alive. It was just really good vibes, good feelings.”
Sales were the strongest they’d ever been. “I was just like, ‘Shit, I better buy more inventory,'” she recalls. “I think this is actually true of so many other retailers… where people in the beginning of 2022 just had such amazing sales and they were like, ‘Oh shit, we’re out. We’re good. We’re in the clear.’ Everyone bought way too much inventory for Fall 2022.”
View the original article to see embedded media.
With fall inventory coming in and increased expenses from the bigger space, “all of that little piggy bank I had saved up or had kept aside started draining away,” Chung says. “I saw people doing all these flash sales and I’m like, ‘Oh, it’s not just me. Everyone has too much inventory.'”
But for a small brick-and-mortar business like LCD, it wasn’t viable to drastically discount new merchandise the way some of her larger online competitors were.
“That’s what really killed us this year,” she says. “Every brand that we carry is also on Ssense, and they did not stop their sales until August 25th. I remember because our online sales were just so low the whole year, and all of a sudden, on that day, they just spiked back up… I went to look at Ssense and was like, ‘Oh, the giant sale banner is finally down.'”
On more than one occasion at LCD, Chung claims, a shopper would come in, try something on, take out their phone and buy the same item on Ssense, right in front of staff.
The negative impact Ssense, specifically, is having on independent retail has been a topic of discussion as of late: Several other shop owners shared similar experiences with the newsletter Blackbird Spyplane earlier this year in an extensive feature on the retailer’s data-driven business practices and their Amazon-esque effects on small competitors.
Chung says she did what she could to pivot and keep the business afloat over the last year. She stopped uploading new merchandise to LCD’s e-commerce site, to eliminate the high costs associated with original photography and data entry, noting that e-commerce shoppers are especially price-sensitive. (“You’re basically competing for who can sell it for the cheapest amount.”) This gave the business a significant lift in April and May: “Actually, it was the first time in 11 years that I had been profitable,” she says. Unfortunately, in-store shopping took a nosedive shortly thereafter, throughout this summer.
View the original article to see embedded media.
“Everyone was in Italy… And I think that the worries about inflation and potential recession really started to hit,” she says. “A lot of these macroeconomic things trickle down and affect small businesses. I had all my pieces in place. I was like, ‘We’re going to be profitable. This is amazing.’ And then just people stopped coming.”
Chung announced LCD’s closure with a heartfelt post on Instagram last weekend, thanking customers and vendors for their support and shedding light on the challenges facing small fashion retailers today.
“When other stores cancelled orders and bounced checks, leaving their designers to scramble in the wake of massive losses, I used that loan money to honor all our orders, despite lockdowns and pandemic panic. So I’ll be paying that loan back until I’m over 70 years old,” she wrote. “This year we were absolutely crushed by heavy discounting by big retailers like Ssense. The gut-wrenching stress of mounting bills, rent, loan payments and watching our margins dribble away has just been too much. As a dear friend tells me, the maths don’t math in retail anymore. In the end, the personal, health and financial toll of running this passion project called LCD has just gotten to be too heavy for me to carry.”
The shared sentiment among the many members of the fashion community who left comments: LCD will be sorely missed, just like Opening Ceremony, Barneys, Bird, Colette, Steven Alan, Totokaelo, Shop Super Street, Jeffrey and other ghosts of fashion retail’s past. It becomes hard not to wonder: Can an independent multi-brand fashion retailer survive anymore?
“I feel like my whole story is a cautionary tale,” Chung says.
Looking back, of course there are things should could have done differently — having a business partner to focuses on finances is important, as is producing an in-house label. “It’s an unfortunate fact that you have to have private label in order for the margins to work,” she says. “And for the longest time, I just didn’t want to do it… I’m trying to share the creativity and magic of people who are way more creative than I am.”
Chung intends to pay off all outstanding invoices from designers (which doesn’t always happen when a store closes), in addition to paying her team while the store remains open through the end of the year. (She invites anyone who wants to help her do that to come into the store and buy something for the holidays.)
“I got into this business to support and highlight young and emerging designers,” she says. “Why would I dick them over now?”
Never miss the latest fashion industry news. Sign up for the Fashionista daily newsletter.
