Slumping sales have led Bashford to let 18 of his 97 employees go.

"Things are tight, there is no question about it," Bashford said Tuesday before heading out to his daily lunch at Le Central, where he frequently dines with his best customer, Willie Brown.

Can't say we didn't see the layoffs coming. Bashford, whose stores in San Francisco, Palo Alto, Mill Valley and Carmel specialize in suits that run as high as $4,000, sent out a letter to shoppers in October offering a $300 discount on purchases of $800.

Apparel in peril: Times are tough, but not so tough that San Francisco can't reject new businesses - even politically correct ones.

American Apparel, the U.S. clothing outfit that pays its work force, mostly immigrant Latinos and Asian Americans, twice the federal minimum wage - plus health care and other benefits - is just too much of a chain operation for San Francisco's hip Mission District.

A year ago, American Apparel, which already has three stores in San Francisco, leased a storefront on Valencia Street near 20th Street. Public notices of the store's planned opening went up three weeks ago, and quick as a zipper, neighbors and community activists hit the phones and spammed the blogosphere with howls that American Apparel would destroy the edgy, boutique quality of their neighborhood.

"Valencia Street is a great experiment and a fragile and cool thing - and we don't want to blow it," said neighborhood showman and one-time mayoral candidate Chicken John.

Supervisor Bevan Dufty, whose district includes the store site, says he hasn't taken an official position on the battle because he doesn't want to be disqualified from voting on the permit should Thursday's Planning Commission vote be appealed to the board.

Dufty did, however, underscore his general support for the city's limits on chain stores, noting that his office has received 250 letters and e-mails opposed to American Apparel on Valencia, and just five in support.

Company spokesman Ryan Holiday said, "A lot of people say they really want us, and a lot say they hate us and want us to go back to L.A. with our immigrant employees."

Although the company recently sold anti-Proposition 8 "Legalize Gay" T-shirts, Dufty and others say this fight isn't about the company ethos.

Explains Dufty: "They are just saying it's not right for Valencia Street."

A street that the Planning Commission lists as having 24 vacant storefronts.

Chief gripe: Private rumblings about embattled BART Police Chief Gary Gee are going public, with BART board moderate Joel Keller now calling on Gee to step aside because of the New Year's Day police slaying of an unarmed rider.

"I hope the chief sees that the time has come for him to retire," Keller said Tuesday.

Keller - whose district covers Contra Costa County on the nine-member board - joins the more vocal Directors Tom Radulovich and Lynette Sweet, who have been hammering both Gee and BART General Manager Dorothy Dugger over the fatal shooting of Oscar Grant and BART's response to it.

Keller, however, is going after only Gee - and he's only talking about his retirement, not his firing.

"Support just seems to be evaporating, and we have a lot of other things we need to deal with in the coming months," Keller said - like a big budget deficit that could mean service cuts and higher fares.

BART's police union is also weighing in. "It's time for a fresh face, someone who can rebuild bridges to the community," said Jesse Sekhon president of the 236-member BART police union.

Still, Gee does have his supporters - including BART board President Tom Blalock and fellow Director James Fang.

"I don't think Chief Gee has done anything wrong," Fang said. "In fact, I think BART's police force has been exemplary."

No-O-U: Once again, the state is running out of money - but this time, it won't be issuing IOUs.

Seems IOUs send the wrong message.

"Wall Street is downgrading the state's credit rating even as we speak," said Hallye Jordan of the state controller's office. "Issuing IOUs ... would effectively knock us out of the lending market. Wall Street wouldn't give us another nickel."

So instead, the state just won't pay its bills.

French hospitality: On the first day of their recent sister-city jaunt to Paris, San Francisco Mayor Gavin Newsom & Co. were treated to a three-course meal at Hotel de Ville - the Parisian City Hall - complete with avocado mousse, chicken and wild rice and dessert, served by a crack team of waiters inside a chandeliered dining hall.

Plus, there was plenty of wine.

Charlotte Shultz, who set up the sister-city relationship back in the days of then-Mayor Dianne Feinstein, was on hand for it all.

As the story goes, Shultz got the program going when, while on a trip to a Third World city, she leaned over to Feinstein and whispered, "I get to pick the next sister city, and here's a hint: P-A-R-I-S."

EXTRA! Catch our new blog at www.sfgate.com/matierandross.

Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Phil can be seen on CBS 5-TV's morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or e-mail matierandross@sfchronicle.com.

This article appeared on page B - 1 of the San Francisco Chronicle