Macy’s Inc. said Thursday it will close six stores in the spring, which will change the affected downtown shopping districts, though not necessarily for the worse.
The three largest Macy’s stores to be shuttered are a 158,000-square-foot Paseo Colorado in Pasadena, Calif., a 362,000-square-foot unit in downtown St. Paul, and a 791,000-square-foot store in downtown Houston.
“Of course it’s a loss for downtown Houston,” said Scott Wegman, vice president of brokerage at Cushman & Wakefield, Houston. “In terms of the overall impact, it’s not significant. Macy’s has a great presence in Houston at the Galleria Almeda Malls. It’s probably disappointing to [Macy’s] to lose that presence. They probably would have preferred not to close the store. Their customer is served at other places close to downtown.”
Macy’s is the only major department store left in downtown Houston. Sakowitz closed in 1990 and Palais Royal relocated in 2011. “The irony is the office market downtown is remarkably healthy,” Wegman said. “The economy is good during the daytime.”
Wegman said the owner of the Macy’s building will probably redevelop the site, not as straight retail, but with a supporting retail component. Macy’s was reportedly using only a portion of its 791,000 square feet.
“Like any big department store, Macy’s doesn’t pay much rent,” said Andrew Graiser, co-president, A&G Realty Partners LLC, which purchases, evaluates, restructures and disposes of real estate and mitigates leases. “The property becomes an incredibly good real estate redevelopment, which could be mixed use with retail and residential, office or medical.
“[Downtown] is still a place where people go shopping,” Graiser said. “There are still a lot of retailers out there looking to grow. Some local retailers might be perfect for the space. That’s not to say that a company like Dillard’s or Target wouldn’t want a good chunk of the box. We saw what Target did in Canada with Zeller’s.” Target in 2011 acquired 189 Zeller’s leases.
The Macy’s closure in St. Paul will end 50 years of department store operations on Wabasha Street. Ronn Thomas, director of brokerage services at Cushman & Wakefield/NorthMarq, said shuttering the store will have “a great impact on the neighborhood. That shopping district has been declining and Macy’s closure will be the nail in the coffin. The trend has been for shopping to move toward the suburbs. Minneapolis has been able to hang on to some retailers, but Saks Fifth Avenue’s Off Fifth Outlet downtown is closing.”
Macy’s owns the five-story structure in St. Paul, which originally opened as a Dayton’s unit in 1963.
Macy’s is also closing a 99,000-square-foot Bloomingdale’s home store at the Fashion Show Mall in Las Vegas, and two more Macy’s units: a 75,000-square-foot one in Belmont, Mass., and an 80,000-square-foot store in downtown Honolulu.
Macy’s in 2013 and 2014 will open stores ranging in size from 105,000 square feet to 180,000 square feet at the Mall of Victor Valley in Victorville, Calif.; Gurnee Mills in Gurnee, Ill.; the Mall at Bay Plaza in the Bronx; University Town Center in Sarasota, Fla., and in Las Vegas, at the Shops at Summerlin and the addition of a men’s store at the Fashion Show Mall. A 200,000-square-foot Macy’s unit is being built at Westfield South Shore in Bay Shore, N.Y., to replace an older store in the same center. Meanwhile, Bloomingdale’s stores will be built at Glendale Galleria in Glendale, Calif., Stanford Shopping Center in Palo Alto, Calif., and a Bloomingdale’s Outlet unit at Fashion Outlets Chicago in Rosemont, Ill.
Macy’s also revealed the consolidation of two stores at Ridgedale Center in Minnetonka, Minn., into an expanded store with 286,000 square feet in 2014.
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