Small Business Center
California’s Central Valley agriculture feeds the country, but in the Los Angeles enclave of Glendale, fertile ground for commerce has helped grow some of its small business retailers into national giants.
The small, independent city of 200,000 people nestled in the Los Angeles megalopolis has long been an unofficial but hugely successful testing ground for retailers since the end of World War II. For parts of nine decades, small businesses have launched from its business district, some taking off into the stratosphere.
It’s a formidable list: the Bob’s Big Boy burger chain in 1938, Baskin-Robbins in 1945, and Panda Express in 1983. Bob’s peaked at 240 restaurants in the late 1980s, Baskin-Robbins has more than 8,000 restaurants in 52 countries and Panda Express has 2,200 restaurants and the sit-down restaurant chain Panda Inn. National companies also have found rich prospects with brick-and-mortar pilot projects in Glendale. Disney, Apple, Samsung and Amazon all sited their earliest physical stores in the area, best known for its Galleria and Americana at Brand marketplaces.
Glendale Community Development Department head Bradley Calvert said the city’s history as an unofficial laboratory for retail guides its efforts to support small businesses now. The city has invested $8 million in the revitalization of a stretch of Artsakh Avenue, along the way becoming both a landlord and small business incubator. Pop-up retailers get free rent in spaces on the Artsakh Paseo, a pedestrian area named for a region of Armenia. The city has the largest population of Armenians outside of Armenia itself, with an estimated 40% claiming ancestral ties, according to UCLA professor Daniel Fittante.
The Artsakh Paseo. Photo courtesy of Greater Downtown Glendale Association
“It’s a perfect kind of test place, in terms of our population’s levels of economic and educational attainment,” Calvert said. Over 40% of adults there have college degrees, and the median household income of about $71,000 a year is in line with the national average. “It makes sense for a lot of retailers and restaurants to start here,” he said.
These small business owners said the waning of the COVID—19 pandemic created an experimental sensibility that has inspired entrepreneurial projects in five city-owned storefronts, including a gift store with handmade paper products and a museum of rock-and-roll photos.
Sean Casey, who runs the Glendale Room in one of those five spaces, said the timing and setting allowed him to branch out from his usual pattern of comedy club and performance space management. Now an eight-year Glendale resident, he enquired about the project during initial public discussions in 2019. “Their economic development department was really great to talk to, and they said they were considering this pilot pop-up program, which sounded super exciting,” Casey said, adding that the pandemic delayed but didn’t deter his plans. What resulted is an intimate performance venue where comedians perform and students take daytime improv classes. “We realized we could pilot something and kind of test the waters to see if people had an appetite for live comedy here.” After the worst of the pandemic, “it was a real reshuffling of what [comedy] spaces were going to come back. It felt super-positive to have something in the works that was hopeful.”
While Glendale Room’s seating capacity is limited and ticket prices remain low, Casey’s labor of love is getting noticed around L.A., and its intimate setting seems to appeal to audiences only now starting to seek out entertainment in public. “I mean, I wasn’t quite ready to start going to giant theaters that were wall-to-wall people,” Casey said of his plan for the space, which has been open for a little more than a year. “We were used to being in our living rooms for more than a year, and it seemed like people wanted a more casual, home-like environment.”
That has allowed more experimental performances, as well as celebrity drop-in sets from Reggie Watts and Jena Friedman. Casey plans to renew his occupancy and be part of the pop-up program’s next round.
The Artsakh district also helped digital entrepreneur Alex Gagne, owner and creative director of the gift seller Chez Gagne, make the leap into brick-and-mortar retail. She started the company “as kind of a side hustle” in 2015 and quit her full-time job in tech marketing to focus on Chez Gagne, which now distributes its products to 3,500 stores nationwide.
A bit more than a year ago, Gagne was spending a rare afternoon in her North Hollywood warehouse when Calvert and a colleague walked in, looking for a gift for Glendale’s retiring fire captain. She wasn’t technically open and didn’t do many sales out of the warehouse, but this visit gave her the boost she needed to expand. “They bought a few things, and Bradley told me about [the Artsakh Creative retail pop-up pilot program] and I drove by it the next day,” she said. She told Calvert the Paseo was an amazing location and asked about the rent. “He said: ‘It’s free.’” Her response: “Are you kidding?”
The 900-square-foot space stocks about 800 SKUs from Gagne’s gift line and from fellow women entrepreneurs. She plans to expand the store’s hours to six days a week for the holiday shopping season, saying the brick-and-mortar foray has been both successful and singular. “It’s a great way to drive foot traffic into something that’s not The Americana,” she said. “Artsakh is more homey, and it has a totally different, more community-oriented vibe. Glendale’s doing a great job making it into an art hub. They want local traffic and it’s not just about the big-box stores.”
From Calvert’s perspective, the project has been as good for Glendale as it has for this cohort of entrepreneurs. “We were trying to pilot what kind of businesses would do well on that street,” he said. “We were trying to seek out retailers that were trying to get a foothold in Glendale and couldn’t afford the Galleria or The Americana.
Glendale’s malls also boast some small business growth stories of their own, though. In 1976, Armenian immigrant Hacop “Jack” Baghdassarian rented 300 square feet in the Galleria and opened Massis Kabob. It was not an instant success, said his son, Gevik, now president of Massis Kabob parent company International Grill. “In the ‘70s and ‘80s malls were food courts, there to give fuel to shoppers. You had an Orange Julius, Hot Dog on a Stick and a pizza joint. They didn’t even have Hispanic food,” the corporate litigator turned restaurateur said. “People would ask: ‘What’s a kabob? Why are you in this food court?’ I hate to use the word ‘pioneer,’ but my dad was.” So Baghdassarian leased Potato Place, another restaurant in the food court, and stuck with its starchy menu, and the family’s income improved.
Then history intervened and skewered the skeptics. The Islamic Revolution of the late 1970s spurred an Iranian diaspora that led straight to Southern California. Many exiles located among the sizable Armenian population there. Massis Kabob offered them a taste of home, and sales grew steadily enough that the founders shuttered the original space and moved its operations to the Potato Place space. The original location is now the largest space in the Galleria’s food court, Gevik said. “He saw the writing on the wall,” the son said of his father, “and the mall food court has changed. Now, it’s all food halls and people go there to eat. It’s a concept as old as the bazaar.”
Gevik and his brother, Peter Baghdassarian, who heads up digital operations for International Grill, took a measured approach to growth. Despite some initial reluctance, Massis Kabob eventually expanded to malls in Sherman Oaks, Topanga, Arcadia, Culver City, and Century City, thanks to a strong partnership with mall operator Westfield.
Their father’s friend Andrew Cherng, meanwhile, created a fast-food version of their Panda Inn sit-down restaurant and set up alongside Massis Kabob in the Galleria food court in 1983. Panda Express has grown speedily, to about 2,200 restaurants in the U.S., Canada, Guatemala, Japan, Mexico, El Salvador, the Philippines, South Korea, Russia, the United Arab Emirates and Germany.
Gevik Baghdassarian said of his company’s slower growth: “We have a model. We’re privately owned and don’t take on any outside money or debt and don’t franchise. We don’t have this large expansion plan. I think that’s how restaurants get into trouble, deciding right away that ‘we’ll have 50 stores in two years.’ We’ve always been fully conscious of opening one store at a time.”
Still, even with a slow path to expansion, the kabobery operators are willing to take on new challenges. In early September, Massis Kabob opened its first brick-and-mortar standalone restaurant — where else but in Glendale?
By Will Swarts
Executive Editor, ICSC Small Business Center