Business ExplorerBusiness World News and in-depth analysis

Held and her husband, Bruce, used personal savings to launch the store with the goal of breaking even in 12 months and turning a profit by year three. But last summer, as weeks and weekends passed, sometimes without a single customer visiting the 3,200-square-foot space on Marietta Street, the next move was clear. In March, Held announced the store would be closing.

A similar scene has played out across metro Atlanta as a combination of low sales, high rents, stiff competition, lack of funds and yes, even the Blue Jean Bandits, have converged to spell the demise of at least 18 independent clothing and lifestyle retailers since the recession began. Many of the now defunct stores were within the predictable five-year 50-percent failure rate set forth by the U.S. Small Business Administration, but a few had been in business for nearly a decade.

The closings were occasionally mysterious such as on February 12, when Moda 404, a five-year-old men’s boutique on Pharr Road sent an e-mail to clients stating, “due to unforeseen circumstances, we regret to announce we are closing down and shutting our doors today at 3 p.m.” Dallas Austin’s Rowdy store, which opened in Lenox Square last year, decamped to the West Coast at the end of March. And the list goes on. Eco Bella in Virginia-Highland. Chelsea Parkes in Sandy Springs. eModa in Midtown. Addiction in Buckhead. Bloom in Alpharetta. My Michelle in Cumming.

Still, despite the uncertainty of the boutique business, a few brave upstarts are taking their chances on Atlanta’s fashion scene, come what may. In February, Emily Dees Boulden opened an Atlanta outpost of Swank, her Birmingham-based store, at Shops Around Lenox. The same month, Rebecca McWaters, opened Lexie + Jane, a hip boutique in a Buckhead house. And this month, Rashidah Ali opened B Chic Shoetique, a shoe-only shop on Lenox Road. These store owners are not overly concerned about the boutique climate in the city, each convinced that her vision is stronger than the economic tides.

“I actually think it couldn’t be a better time to be opening a business. I feel like I’m coming at a time when it’s a little better,” said McWaters, 26, who was sure to keep the majority of her merchandise under $200 and avoid brands carried by more established boutiques in the area.

According to California-based retail consultant, George Whalin, McWaters is on the right track. Whalin, author of “Retail Superstars,” says it isn’t foolhardy to open a store in these times as long as you have the capital, about $300,000 to $500,000 for clothing retailers, and are able to distinguish yourself from the competition.

“If I owned a clothing store and I had to compete with Bloomingdale’s and Macy’s and other big guys, I wouldn’t do it,” Whalin said. There’s just too much competition, particularly for independent stores that can no longer depend on bank funding. “Anytime we have an economic downturn of any significance, indie retailers typically don’t have the financial wherewithal to last through this thing,” he said.

That’s what Camille Wright, owner of the former Kaleidoscope boutique in Decatur, discovered after a meeting with her accountant.

“He sat me down and was like, ‘It’s nine years and this climate is not forgiving to boutiques right now… You can’t use any more of your own money,’ and we were like, ‘Good, because we don’t have any.’”

First came those pesky Blue Jean Bandits, the smash and grab thieves who stole high-end denim from local stores. After Wright’s store was hit multiple times, she was dropped from State Farm Insurance and had to pay triple for subsequent coverage at another company. Add to that a monthly rent of $5,000 and salaries for her five employees, and by Jan. 31, she had no choice but to close her doors.

Wright has moved on to other ventures, but laments what she sees as a decline in the Atlanta shopping scene. “It’s not fashionable to shop. It’s almost like clandestine shopping going on. The people who actually spend money are at Phipps Plaza on Tuesday at 10 a.m.,” she said.

Even retail veterans like Melissa Murdock of Sandpiper boutiques in Sandy Springs and Vinings say their customers haven’t been shopping like they used to.

“I’ve never been through anything like this and a lot of it is consumer confidence,” Murdock said. “What is important to people is keeping their kids in private schools and keeping a car in the driveway. Even if it’s not that dire, it’s the feeling that things may become dire.”

With Atlanta’s unemployment rate hovering just above the national average around 10.5 percent, according to the Georgia Department of Labor, it isn’t likely that shoppers will head back to boutiques anytime soon.

Murdock, in conjunction with other retailers, attempted to infuse excitement into the local retail scene with Fashion Over Atlanta last fall, billed as an evening of special events at boutiques around the city. The event was well-received, but not enough to keep several stores from going under.

Jaci Efron, owner of the now shuttered JAC in Inman Park, decided last summer the end was near. The store, which opened in 2007 with men’s and women’s apparel, had a horrible year in 2009, she said, even though the online store launched a year earlier helped offset some losses.

Efron watched as the designers she stocked in her store announced partnerships with Target. She watched as the vision of Inman Park as a destination neighborhood faded when people refused to leave the comfort of their own communities. She changed her merchandise mix to offer more affordable items. But shoppers didn’t come. So in February, she closed.

“Everyone who would come in was so upset and not just the ones who knew me… but they never spent any money and that’s the bottom line,” she said.

Efron has since converted JAC to an online shop that sells only baby items. Now she has the good fortune of waking up with orders in her inbox, but she has to sell a lot more baby clothes to make money.

Still, Atlanta’s dreary retail landscape didn’t dissuade Rashidah Ali from opening B Chic Shoetique this month. Ali, who owns a high-end sister store in Harlem, New York, with shoes priced from $300 to $1,200 is certain there is a market in Atlanta for stylish shoes in the $100 to $300 range. Ali did her own research, spending days and nights staking out the space at 2770 Lenox Road to gauge shopper traffic. She negotiated her rent. She strategically purchased inventory and launched a Web site the same day the store opened.

Experience and evolution, she has decided, are on her side. “I feel like in my experience with my first store, I learned a lot of savvy ways to cut costs,” Ali said. “And I know that no matter what happens in the world, we still have to wear shoes.”

Similar Posts:

• Retailers retreat to Atlanta’s malls, urban areas
• Payment Processing Basics: Offering Customers the Ultimate in Convenience
• Aaron’s acquires Crusader Rent to Own stores
• Black Friday sales barely up, online surges
• Asian markets flourish like kudzu