(Bloomberg) -- It took just minutes for more than 20 thieves, clad in hoods and masks, to swarm the Nordstrom store in the Westfield Topanga shopping center and make off with $300,000 of handbags and other luxury items. A security guard was blasted in the face with bear spray, according to the Los Angeles Police Department, which dubbed it a “flash rob.”
It came just days after at least 30 suspects stole more than $400,000 in merchandise from an Yves Saint Laurent store at a mall in the Los Angeles suburb of Glendale and yet another incident when a gang nabbed armloads of Gucci bags from a Bloomingdale’s in Westfield Century City mall.
Fittingly for the Los Angeles area, the daylight raids captured on surveillance cameras and cellphones have gone viral — played repeatedly across social media and local television, and now forcing California Governor Gavin Newsom to take action. This week he awarded $267 million in grants to 55 local agencies to combat the crimes, with money slated for better surveillance technology and also to target criminals in blitz operations across the state.
“Enough with these brazen smash-and-grabs,” Newsom said in a statement. “When shameless criminals walk out of stores with stolen goods, they’ll walk straight into jails.”
https://t.co/6FqVh233On pic.twitter.com/WIdtZzBrVE— ABC7 Eyewitness News (@ABC7) August 14, 2023
California isn’t alone in dealing with a surge in retail theft. The National Retail Federation estimates the cost of “shrink” and other inventory losses has climbed to almost $100 billion a year, ranging from small-time pilfering to Mafia-type cargo heists. Mentions of “theft” and “shrink” have more than doubled in company earnings calls since the first quarter of this year, according to a Bloomberg transcript analysis, with Dick’s Sporting Goods Inc. missing analysts’ estimates largely because of theft.
“Losses from theft are at historical highs, and I'd say, we find it unacceptable,” Erik B. Nordstrom, chief executive officer of the eponymous department store chain, said during an earnings call last month. “We're looking at everything we can do to make our stores are safe and secure.”
Critics though, particularly within California, say better prevention and surveillance won’t ultimately solve the problem, and instead point the finger at lax prosecution as a factor contributing to the jump in flash raids.
Los Angeles, for instance, no longer requires cash bail for suspects charged with nonviolent misdemeanor penalties, allowing many people accused of low-level crimes to be released without having to post a bond. Petty larceny — theft of goods valued at $950 or less — is a “cite and release” offense in California, according to Rachel Michelin, chief executive officer of the California Retailers Association. Many participants in flash mob incidents started out as small-time shoplifters, who graduated to more serious offenses after getting away with a hand slap for entry-level theft, she said.
“When people realize there's no consequence, that behavior is going to escalate,” Michelin said.
The crimes are having a ripple effect on local economies, said Michelin. Sales tax revenue falls as fearful shoppers stay away from stores, leading to closures and demoralized workers, making it harder for cities to pay police or clear sidewalk vagrants camped outside vacant storefronts, further discouraging new businesses from opening.
When the Nordstrom in the Westfield San Francisco Centre announced in May that it was closing, the mall’s owner, Unibail-Rodamco-Westfield, blamed “unsafe conditions for customers, retailers, and employees.” This week, American Eagle Outfitters sued Westfield, accusing it of letting the mall “deteriorate into disarray” and exposing its staff to violence and robberies, according to a complaint filed in Superior Court in San Francisco County.
Unibail-Rodamco-Westfield declined to comment on both the thefts and the lawsuit.
In the Los Angeles area, where mall culture has long inspired Hollywood scriptwriters, a summer wave of flash mob attacks swept across various retailers, from discount to luxury. In August, thieves targeted a WSS shoe store in Highland Park twice in a row, stealing boxes of sneakers. A Home Depot in Signal Hill lost $5,000 of power tools to robbers. Two Ross Dress For Less stores in West LA and Culver City were also hit.
“This type of criminal activity places an enormous burden on our local businesses and is an assault against our entire community,” Los Angeles County District Attorney George Gascon said in a statement this month.
But some retailers have criticized Gascon for his progressive stance on petty crimes, which they say encourages retail thefts. Gascon was elected in 2020 on a platform of reducing racial disparities in the criminal justice system.
“The problem is with the DA’s office,” said Rick Caruso, owner of the Americana at Brand mall in Glendale where thieves looted the YSL store. “You can have all the task forces in the world, but if nobody's being held accountable, it doesn't matter,” said Caruso, who unsuccessfully ran for Los Angeles Mayor last year.
Venusse Navid, a spokesperson for the DA, didn't directly address a question about criticism that Gascon has gone easy on criminal suspects. She said Gascon has started requesting bail for organized retail theft offenders. At least 19 suspects have been arrested and charged since mid-August, and some remain in jail. One 32-year-old suspect is being held on bail of $1.2 million because of additional charges from prior convictions.
“We view them as organized crime,” Gascon said during a press conference when asked about retail theft rings. “And we will use every tool available under the law, when there is an arrest made.”
The flash mobs vary from small kitchen-table gangs to more sophisticated groups acting on behalf of higher-level commanders.
Before a strike, scouts case stores, targeting items with resale potential and planning escape routes, according to Michelin. They use social media to gather participants, telling them about the location and timing and advising them to use emergency exits and avoid the use of weapons, which could lead to more serious criminal charges, she said. The goal is to create a large enough group to intimidate onlookers and evade capture.
"Suspects go to extreme lengths to avoid detection and are cognizant of how much time they are spending in the store to avoid law enforcement response," Los Angeles Police Detective Sam Arnold said in an email.
The gang that targeted the YSL store at Caruso’s Americana at Brand mall was in and out within two minutes, he said, fleeing in getaway cars before security could respond. “These are planned events, serial criminals,” Caruso said. “They’re very methodical how they go about this.”
Stolen items are often resold online or at swap meets. Merchandise from thefts at Ross Dress For Less and WSS was found at a known resale spot at the central city intersection of Alvarado and 8th streets — an area crowded by street vendors, according to LA District Attorney press releases.
Caruso, who last year spent more than $100 million on his mayoral campaign centered on public safety, has increased surveillance and the presence of security personnel — both uniformed and undercover — around his malls. He’s also offering a $50,000 reward for tips leading to arrests or convictions.
“We've had to take responsibility because government has failed to ensure that businesses are safe,” he said.
--With assistance from Olivia Rockeman and Joe Schneider.
©2023 Bloomberg L.P.