Business

Fred Segal failed to compete in the 'very hard beast' of L.A. fashion retail. Here's what went wrong

Published

1 year ago

August 3, 2024

Fred Segal failed to compete in the 'very hard beast' of L.A. fashion retail. Here's what went wrong

It was peak 1990s when Cher Horowitz, the fashionable teen queen in the hit film “Clueless,” needed her “most capable-looking outfit” to take her driving test at the DMV.

“Lucy!” she bellowed from her Beverly Hills bedroom, a mound of discarded designer clothes at her feet. “Where’s my white collarless shirt from Fred Segal?”

The beloved Los Angeles boutique retailer got another shoutout in the 2001 rom-com “Legally Blonde”: “Two weeks ago, I saw Cameron Diaz at Fred Segal,” Reese Witherspoon’s Elle Woods said, “and I talked her out of buying this truly heinous angora sweater.”

For more than six decades, Fred Segal was a fixture of L.A.’s retail landscape and a pop culture touchstone. Locals and tourists alike flocked to its ivy-covered walls for upscale but laid-back looks that epitomized effortless Southern California style. It was also one of the city’s most reliable hot spots for A-list celebrity sightings, from the Beatles in the 1960s to, more recently, stars including Britney Spears, Kendall Jenner, David Beckham and Jennifer Aniston.

That all but came to an end Tuesday, when Fred Segal shut its two remaining L.A.-area clothing stores: its West Hollywood flagship on Sunset Boulevard and its Malibu location. (A Fred Segal Home showroom in Culver City remains open.) The retailer — which once had nine locations in California and outposts in Switzerland and Taiwan — blamed the lingering financial effects of the pandemic and the challenges of running a multi-brand company that carried nearly 200 labels.

“Things were really going great until COVID hit,” owner Jeff Lotman, who bought Fred Segal in 2019, told The Times in an interview announcing the closures.

Industry watchers and rivals said the brand’s downfall was the result of several missteps. Once at the forefront of cutting-edge L.A. style, Fred Segal had become stagnant and lacked newness, they said. A lack of product differentiation, stiff competition and the shift to e-commerce also contributed to the chain’s demise.

“One of the challenges for us was that 90% of the brands that we carried were available elsewhere online,” Lotman said in a follow-up conversation Thursday. “Margins became very thin.”

In a city where retail stores flame out quickly, Fred Segal for years was able to stay on top of the latest trends — and set many of them, thanks to its visionary founder.

In 1961, the Chicago-born, Los Angeles-raised Fred Segal opened his first store, a 300-square-foot space on Santa Monica Boulevard in West Hollywood. Segal had already been embellishing denim with rhinestones, elevating them from everyday closet staples into something one-off and bespoke, and pioneered an in-store “jeans bar,” a concept that would be copied by rivals around the world.

“When Fred Segal the man opened Fred Segal, it was a truly unique place,” Lotman said. “He invented the fashion jean, pop-up shops and experiential shopping. Also he had brands that were not sold anywhere. It was truly one of a kind. He was the original curator of cool.”

In 1965, having outgrown the original space, Segal relocated to the corner of Melrose Avenue and Crescent Heights Boulevard. By buying up other properties in the area, he cobbled together what would eventually be a 29,000-square-foot complex that kick-started the transformation of that stretch of Melrose into the designer-filled destination it is today.

Segal began to experiment with the then-novel shop-in-shop concept, first tapping employees to take charge of different areas within the store, and later recruiting other retail innovators to fill the warren of disparate spaces, making sure each complemented the others.

“They were influencers before there were influencers, before there was social media,” said Nicole Craig, a professor at the Arizona State University Fashion Institute of Design and Merchandising. “One of the reasons why they were successful is that they curated a lot of really cool, up-and-coming brands.”

Among them: Kate Spade, Juicy Couture, J Brand and Hard Candy, all fledgling businesses when Fred Segal granted them coveted floor and shelf space.

But in recent years, amid the 2019 ownership change, the pandemic and a challenging retail environment that has led to a rash of store closures for brands big and small, Fred Segal struggled.

“It’s much harder to stand out than it used to be,” Craig said. “That’s where Fred Segal lost its way a little bit. They didn’t have enough of that fresh product that you couldn’t get elsewhere.”

Shelda Hartwell, a vice president at the retail and fashion consultancy Doneger Group, said that although consumers value heritage brands with history and name recognition, Fred Segal needed to do more to keep the excitement going.

“They stayed too much in the sameness for too long,” she said. “You had other retailers that were coming in and opening up their first brick-and-mortar stores that were just offering much more of an experience.”

The experiential aspect is even more important nowadays because so much shopping can be done online, said Mac Hadar, buyer and director of operations for H.Lorenzo, a competing boutique retailer with a store a couple of blocks away from the now-shuttered Fred Segal flagship.

“The retail stores that have continued to do well are the ones that are continuing to push the boundaries and push the limits,” Hadar said. “With the rise of online, you can find almost anything, so you have to have a very original point of view and be pretty daring with what you choose to bring into the store.”

Fraser Ross, owner of Kitson, one of Fred Segal’s biggest rivals, called retail “a very hard beast right now.” Successful brands need to figure out how to evolve quickly, he said.

The Fred Segal store in Santa Monica.

(Fred Segal)

“People aren’t shopping the way they did,” he said. “In the days when you didn’t have Instagram and the web, you could open lots of stores in every neighborhood in L.A. But now, you’ve got to be specific in trying to get the traffic through your door.”

One change that Kitson made is that “we’re not really chasing the hottest brands anymore,” Ross said, because those brands can easily be found online.

Instead, Kitson, which was founded in 2000 and now has four L.A.-area stores, has leaned more heavily into exclusive merchandise and SoCal-inspired products and brands that appeal to tourists, such as Aviator Nation, FreeCity and Sol Angeles. Fred Segal, he said, didn’t embrace that lifestyle aesthetic as much.

Fred Segal also failed to amplify its online presence, which hurt the brand’s relevance, said Ilse Metchek, an industry analyst and former president of the California Fashion Assn. She said the company did a poor job of advertising on social media and through fashion influencers, who now play an outsize role in the industry.

“The idea of legacy brands doesn’t appeal as much anymore,” Metchek said. “You’d rather look at something new that Instagram or TikTok is showing you.”

Lotman, who is chief executive of licensing company Global Icons, bought Fred Segal with ambitious plans to open roughly 20 new shops in major cities around the world and oversee a move into home decor and accessories. Before the pandemic, he had pending deals to open stores in Dubai, Canada and Japan.

Now, the future of the storied brand is unclear.

The Segal family owns the Fred Segal trademark, Lotman said, and any decision about whether to open new stores or begin selling online again would be up to them. Two Fred Segal shops at Resorts World in Las Vegas, which Lotman is not involved with, are still operating.

Larry Russ, the family’s attorney, said this is not the end of the road for the brand but could not share more details.

“We are going to be looking for a new operator to open up more stores in the future,” he said.

Business

They graduated from Stanford. Due to AI, they can’t find a job

Published

4 hours ago

December 19, 2025

Press Room

They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”

Business

Disney+ to be part of a streaming bundle in Middle East

Published

16 hours ago

December 18, 2025

Press Room

Disney+ to be part of a streaming bundle in Middle East

Walt Disney Co. is expanding its presence in the Middle East, inking a deal with Saudi media conglomerate MBC Group and UAE firm Anghami to form a streaming bundle.

The bundle will allow customers in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE to access a trio of streaming services — Disney+; MBC Group’s Shahid, which carries Arabic originals, live sports and events; and Anghami’s OSN+, which carries Arabic productions as well as Hollywood content.

The trio bundle costs AED89.99 per month, which is the price of two of the streaming services.

“This deal reflects a shared ambition between Disney+, Shahid and the MBC Group to shape the future of entertainment in the Middle East, a region that is seeing dynamic growth in the sector,” Karl Holmes, senior vice president and general manager of Disney+ EMEA, said in a statement.

Disney has already indicated it plans to grow in the Middle East.

Earlier this year, the company announced it would be building a new theme park in Abu Dhabi in partnership with local firm Miral, which would provide the capital, construction resources and operational oversight. Under the terms of the agreement, Disney would oversee the parks’ design, license its intellectual property and provide “operational expertise,” as well as collect a royalty.

Disney executives said at the time that the decision to build in the Middle East was a way to reach new audiences who were too far from the company’s current hubs in the U.S., Europe and Asia.

Business

Erewhon and others shut by fire set to reopen in Pacific Palisades mall

Published

1 day ago

December 18, 2025

Press Room

Erewhon and others shut by fire set to reopen in Pacific Palisades mall

Fancy grocer Erewhon will return to Pacific Palisades in an entirely rebuilt store, as the neighborhood’s luxury mall, owned by developer Rick Caruso, undergoes renovations for a reopening next August.

Palisades Village has been closed since the Jan. 7 wildfire destroyed much of the neighborhood. The outdoor mall survived the blaze but needed to be refurbished to eliminate contaminants that the fire could have spread, Caruso said.

The developer is spending $60 million to bring back Palisades Village, removing and replacing drywall from stores and restaurants. Dirt from the outdoor areas is also being replaced.

Demolition is complete and the tenants’ spaces are now being restored, Caruso said.

“It was not a requirement to do that from a scientific standpoint,” he said. “But it was important to me to be able to tell guests that the property is safe and clean.”

Erewhon’s store was taken down to the studs and is being reconfigured with a larger outdoor seating area for dining and events.

When it opens its doors sometime next year, it will be the only grocer in the heart of the fire-ravaged neighborhood.

The announcement of Erewhon’s comeback marks a milestone in the recovery of Pacific Palisades and signals renewed investment in restoring essential neighborhood services and supporting the community’s long-term economic health, Caruso said.

A photograph of the exterior of Erewhon in Pacific Palisades in 2024.

(Kailyn Brown/Los Angeles Times)

“They are one of the sexiest supermarkets in the world now and they are in high demand,” he said. “Their committing to reopening is a big statement on the future of the Palisades and their belief that it’s going to be back stronger than ever.”

Caruso previously attributed the mall’s survival to the hard work of private firefighters and the fire-resistant materials used in the mall’s construction. The $200-million shopping and dining center opened in 2018 with a movie theater and a roster of upmarket tenants, including Erewhon.

“We’re honored to join the incredible effort underway at Palisades Village,” Erewhon Chief Executive Tony Antoci said in a statement. “Reopening is a meaningful way for us to contribute to the healing and renewal of this neighborhood.”

Erewhon has cultivated a following of shoppers who visit daily to grab a prepared meal or one of its celebrity-backed $20 smoothies.

The privately held company doesn’t share financial figures, but has said its all-day cafes occupy roughly 30% of its floor space and serve 100,000 customers each week.

Erewhon has also branched out beyond selling groceries.

Its fast-growing private-label line now includes Erewhon-branded apparel, bags, candles, nutritional supplements and bath and body products.

Erewhon will also open new stores in West Hollywood in February, in Glendale in May and at Caruso’s The Lakes at Thousand Oaks mall in July 2026.

About 90% of the tenants are expected to return to the mall when it reopens, Caruso said, including restaurants Angelini Ristorante & Bar and Hank’s. Local chef Nancy Silverton has agreed to move in with a new Italian steakhouse called Spacca Tutto.

In May, Pacific Palisades-based fashion designer Elyse Walker said she would reopen her eponymous store in Palisades Village after losing her 25-year flagship location on Antioch Street in the inferno.

Fashion designer Elyse Walker announced the reopening of her flagship store

“People who live in the Palisades don’t want to leave,” Walker said at the time. “It’s a magical place.”

Caruso carried on annual holiday traditions at Palisades Village this year, including the lighting of a 50-foot Christmas tree for hundreds of celebrants Dec. 5. On Sunday evening, leaders from the Chabad Jewish Community Center of Pacific Palisades gathered at the mall to light a towering menorah.

A total of 6,822 structures were destroyed in the Palisades fire, including more than 5,500 residences and 100 commercial businesses, according to the California Department of Forestry and Fire Protection.

Caruso said he hopes the shopping center’s revival will inspire residents to return. His investment “shows my belief that the community is coming back,” he said. “Next year is going to be huge.”