Macy's Closing 10 Stores in January 2022

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Re: Macy's Closing 10 Stores in January 2022

Post by storewanderer »

Alpha8472 wrote: December 4th, 2021, 2:05 pm The very posh outdoor mall called Broadway Plaza Walnut Creek, California had 2 Macy's up until a few years ago. One was a former I. Magnin and the other was an Emporium Capwell. That mall is so successful that the sales are out of control. The customers are rich and the stores are crowded. However, Macy's consolidated the Men's store into the main Women's store. Neiman Marcus at the mall recently went out of business only a couple of years ago. It seems like it was only open a few years. So some retailers can't seem to make it while others seem to thrive.

Two cities over at Sunvalley Mall in Concord, California they also have 2 Macy's stores with one being a former Emporium Capwell. Those two stores do decent business, but it seems like Macy's would want to close one. There is not enough room to combine the merchandise into one store.
In terms of "stores" Macy's counts these situations where there are two buildings at the same mall as one store. So they could consolidate stores separately from the store closure program in these types of situations, which they have done (like the two Union Square stores).

In these higher income locations one consideration which I am sure is often mentioned but rarely executed is converting one of the two buildings to Bloomingdales.
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Re: Macy's Closing 10 Stores in January 2022

Post by buckguy »

storewanderer wrote: December 4th, 2021, 2:09 pm
Alpha8472 wrote: December 4th, 2021, 2:05 pm The very posh outdoor mall called Broadway Plaza Walnut Creek, California had 2 Macy's up until a few years ago. One was a former I. Magnin and the other was an Emporium Capwell. That mall is so successful that the sales are out of control. The customers are rich and the stores are crowded. However, Macy's consolidated the Men's store into the main Women's store. Neiman Marcus at the mall recently went out of business only a couple of years ago. It seems like it was only open a few years. So some retailers can't seem to make it while others seem to thrive.

Two cities over at Sunvalley Mall in Concord, California they also have 2 Macy's stores with one being a former Emporium Capwell. Those two stores do decent business, but it seems like Macy's would want to close one. There is not enough room to combine the merchandise into one store.
In terms of "stores" Macy's counts these situations where there are two buildings at the same mall as one store. So they could consolidate stores separately from the store closure program in these types of situations, which they have done (like the two Union Square stores).

In these higher income locations one consideration which I am sure is often mentioned but rarely executed is converting one of the two buildings to Bloomingdales.
The Bloomingdale conversions were mostly done right after the Federated-May merger. Some of the May-built Lord & Taylors worked for this----Macy seemed to keep the legacy L&T locations as Lord & Taylor. A few redundant May or Federated stores also worked----the Macy's at Lenox Square, an upscale mall in Atlanta, comes to mind. It was the ideal candidate to be a Bloomingdale's because Rich's (the eventual Macy's) had a relatively upscale "flagship" store at the mall and the other anchor was Nieman-Marcus, while the overall tenant base was pretty upscale (e.g., Brooks Brothers). Given what's happened to malls and retail, generally, there aren't many opportunities for Bloomingdale conversions now.

The consolidation of dual stores seems pretty inevitable and its been quietly happening for a long time. Dillard has done the same thing, especially when they got around choosing one of the stores for renovation. My guess is that malls encouraged the dual store model so they wouldn't have empty anchors. Macy and Dillard either owned the property or could negotiate favorable leases, with the expectation there'd be sufficient volume in the short run to at least break even. The "second stores" I've seen usually have not been very successful and as mall management has tried to diversify their tenants, its probably been easy for Macy and Dillard to sell these for redevelopment, especially if its something that doesn't compete with them like Dick's or a collection of restaurants.
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Re: Macy's Closing 10 Stores in January 2022

Post by ClownLoach »

storewanderer wrote: December 4th, 2021, 2:09 pm
Alpha8472 wrote: December 4th, 2021, 2:05 pm The very posh outdoor mall called Broadway Plaza Walnut Creek, California had 2 Macy's up until a few years ago. One was a former I. Magnin and the other was an Emporium Capwell. That mall is so successful that the sales are out of control. The customers are rich and the stores are crowded. However, Macy's consolidated the Men's store into the main Women's store. Neiman Marcus at the mall recently went out of business only a couple of years ago. It seems like it was only open a few years. So some retailers can't seem to make it while others seem to thrive.

Two cities over at Sunvalley Mall in Concord, California they also have 2 Macy's stores with one being a former Emporium Capwell. Those two stores do decent business, but it seems like Macy's would want to close one. There is not enough room to combine the merchandise into one store.
In terms of "stores" Macy's counts these situations where there are two buildings at the same mall as one store. So they could consolidate stores separately from the store closure program in these types of situations, which they have done (like the two Union Square stores).

In these higher income locations one consideration which I am sure is often mentioned but rarely executed is converting one of the two buildings to Bloomingdales.
Macy's has activist investors that are trying to push them to split the company. These proposals are likely to generate PR to help the stock. Wall Street wants to see buildings close to cut costs, period. At this point if they had an outhouse behind a store they could close and describe it as a closure it would be a win for their stock. Any closures are regardless of internal operations where they may call it one store, Wall Street doesn't care.

Saks did this retail/ecomm split and apparently it is a logistical nightmare as the online division is its own company but it sells the merchandise from the store and the store associates fulfill it. Saks is small enough that this probably didn't get much regulatory attention but I think the transaction is illegal. Despite the activists beliefs I imagine that if Macy's tried to do the same they are so large that the SEC would not allow it. Think about what they say they want - a company that gets all the profit from an e-commerce sale out of the stores. The store has to buy the product, stock the product, ship the product (if in a store building) - and fulfill the pickup order - along with all of those costs. But if it was ordered online then the "e-commerce company" would get the entire credit for the sale so the retail side would show tremendous negative comps for a year after the transaction, and the "e-commerce company" would get all the margin dollars. The "e-commerce company" would take over warehouses that only ship orders vs fulfill store DC type shipments if applicable. Under such a structure of course we know the brick and mortar business would topple into bankruptcy almost instantly because of the way the sales would be accounted for. I'm sure the activist investors would have that retail stock "shorted" so they make a big profit and own all the "e-commerce company" stock. Basically they really want to force the company into liquidation and take all the profits while leaving everyone without a job and pennies on the dollar for the creditors.

I would not want to be the CEO of Macy's at this point because of these horrible investor problems. They finally ran out the people who wanted the real estate sold and leased back - the fully owned flagship Macy's store in NYC at one point was literally worth more than the market cap for the company and highly profitable. Basically the vulture investors wanted this sold so they could steal the property and Macy's could never afford to lease such a building that is still in this day critical to the company. Now that issue is fixed and these new vultures come along with their creative accounting proposal around e-commerce which would kill the entire company while they profit from its demise.
Last edited by ClownLoach on December 5th, 2021, 6:30 am, edited 3 times in total.
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Re: Macy's Closing 10 Stores in January 2022

Post by ClownLoach »

buckguy wrote: December 5th, 2021, 5:51 am
storewanderer wrote: December 4th, 2021, 2:09 pm
Alpha8472 wrote: December 4th, 2021, 2:05 pm The very posh outdoor mall called Broadway Plaza Walnut Creek, California had 2 Macy's up until a few years ago. One was a former I. Magnin and the other was an Emporium Capwell. That mall is so successful that the sales are out of control. The customers are rich and the stores are crowded. However, Macy's consolidated the Men's store into the main Women's store. Neiman Marcus at the mall recently went out of business only a couple of years ago. It seems like it was only open a few years. So some retailers can't seem to make it while others seem to thrive.

Two cities over at Sunvalley Mall in Concord, California they also have 2 Macy's stores with one being a former Emporium Capwell. Those two stores do decent business, but it seems like Macy's would want to close one. There is not enough room to combine the merchandise into one store.
In terms of "stores" Macy's counts these situations where there are two buildings at the same mall as one store. So they could consolidate stores separately from the store closure program in these types of situations, which they have done (like the two Union Square stores).

In these higher income locations one consideration which I am sure is often mentioned but rarely executed is converting one of the two buildings to Bloomingdales.
The Bloomingdale conversions were mostly done right after the Federated-May merger. Some of the May-built Lord & Taylors worked for this----Macy seemed to keep the legacy L&T locations as Lord & Taylor. A few redundant May or Federated stores also worked----the Macy's at Lenox Square, an upscale mall in Atlanta, comes to mind. It was the ideal candidate to be a Bloomingdale's because Rich's (the eventual Macy's) had a relatively upscale "flagship" store at the mall and the other anchor was Nieman-Marcus, while the overall tenant base was pretty upscale (e.g., Brooks Brothers). Given what's happened to malls and retail, generally, there aren't many opportunities for Bloomingdale conversions now.

The consolidation of dual stores seems pretty inevitable and its been quietly happening for a long time. Dillard has done the same thing, especially when they got around choosing one of the stores for renovation. My guess is that malls encouraged the dual store model so they wouldn't have empty anchors. Macy and Dillard either owned the property or could negotiate favorable leases, with the expectation there'd be sufficient volume in the short run to at least break even. The "second stores" I've seen usually have not been very successful and as mall management has tried to diversify their tenants, its probably been easy for Macy and Dillard to sell these for redevelopment, especially if its something that doesn't compete with them like Dick's or a collection of restaurants.
I remember that when Macy's West consolidated multiple brands in California, Dillard's started to grab closed leased buildings (I think they have one in Palmdale?). They wanted to expand onto the West Coast with a sizable store fleet. Macy's quickly pivoted and kept far more Robinsons-May and Broadway buildings in SoCal than originally planned and suddenly many malls had the dual store concept. I think the intent was that over time they would consolidate some and control their own destiny by ensuring they went to indirect competition like Dicks, movie theater chains, and Target. Where this went sideways was in several cases they gave up their better store during the consolidation and I think this is still hurting them as well as the malls where this occurred. For example in Westminster Mall they had a beautiful new Macy's building and a really dumpy old May Co. building on the wrong side (furthest from the freeway). They unloaded the nice new store on Target. In Lakewood this was even worse - they unloaded the beautiful new store on Costco who demolished it less than a decade after it opened. I think these bad decisions where they kept the older building have cost them over time. In Mission Viejo where we know that they're going to consolidate they are not making this mistake and are going to close the dark, claustrophobic larger women's store so housing can be built while keeping the newer men's store. I think an argument could be made that the men's store is on a lot with a view and would be a better place to build homes - thankfully Macy's now values their business and recognizes that if they pursue this consolidation into their worse building they will likely not survive and push the mall to the brink of irrelevance as has happened elsewhere. They have figured out the customer will accept the consolidation but they want the better shopping environment to survive and frown upon seeing the perceived "better" store close.
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Re: Macy's Closing 10 Stores in January 2022

Post by storewanderer »

ClownLoach wrote: December 5th, 2021, 6:06 am
I remember that when Macy's West consolidated multiple brands in California, Dillard's started to grab closed leased buildings (I think they have one in Palmdale?). They wanted to expand onto the West Coast with a sizable store fleet. Macy's quickly pivoted and kept far more Robinsons-May and Broadway buildings in SoCal than originally planned and suddenly many malls had the dual store concept. I think the intent was that over time they would consolidate some and control their own destiny by ensuring they went to indirect competition like Dicks, movie theater chains, and Target. Where this went sideways was in several cases they gave up their better store during the consolidation and I think this is still hurting them as well as the malls where this occurred. For example in Westminster Mall they had a beautiful new Macy's building and a really dumpy old May Co. building on the wrong side (furthest from the freeway). They unloaded the nice new store on Target. In Lakewood this was even worse - they unloaded the beautiful new store on Costco who demolished it less than a decade after it opened. I think these bad decisions where they kept the older building have cost them over time. In Mission Viejo where we know that they're going to consolidate they are not making this mistake and are going to close the dark, claustrophobic larger women's store so housing can be built while keeping the newer men's store. I think an argument could be made that the men's store is on a lot with a view and would be a better place to build homes - thankfully Macy's now values their business and recognizes that if they pursue this consolidation into their worse building they will likely not survive and push the mall to the brink of irrelevance as has happened elsewhere. They have figured out the customer will accept the consolidation but they want the better shopping environment to survive and frown upon seeing the perceived "better" store close.
I think Dillard's built the Palmdale building. It may be they demolished something else though as it was built 9-10 years after the mall opened.

The Macys building in Palmdale was a Gottschalks they took over in 2010; seems like very minimal remodeling was done in there. Before that they were not present there. They passed on the market in the 90's and let Dillard's have that one. It really seems like throughout the 90's and 00's, Macys West was very scared of Dillard's and played a successful real estate monopoly game and very much kept Dillard's out of California. Or they were trying to route Dillard's into buying something like Gottschalks (would have been a poor fit) or Mervyns (even worse fit). Letting them get into on paper not the most desirable locations like Palmdale, El Centro, and Stockton almost feels more like a planned joke than a coincidence. I suspect Macys let Dillard's proceed in Palmdale, El Centro, and Stockton thinking the locations were so undesirable that they would not actually go forward with opening stores in those three places, yet, they did, and those stores are still open today.

Same in El Centro- Macys passed on that mall but got the store almost brand new from May.
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Re: Macy's Closing 10 Stores in January 2022

Post by veteran+ »

Did the old Buffums chain ever play into this?
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Re: Macy's Closing 10 Stores in January 2022

Post by buckguy »

Buffum's stores were small and in a mix of Class-A and not so Class-A centers. A few were former Walker-Scott stores (old San Diego chain) which ran even smaller. The locations that remained dept stores often were demolished and replaced because of their small size. The store at Santa Anita was replaced by a Nordstrom in this way. Robinson-May did the same at Glendale Galleria. In their last years, Buffum's was owned by Australian companies. They were an upper middle type store which would have fit Dillard's but the small size would have been an issue. They also were a "grey lady" type store and didn't have a lot of "brand equity" for anyone to keep them in business.

My understanding was that Gottschalk occupied a niche comparable to the Mercantile chains, which were lower-middle brow and mostly in small to medium markets. Dillard had no trouble merging Mercantile, although as with Higbee (an upper middle brow store) they didn't do so well with their northern markets. Dillards niche seems to be sunbelt malls--in terms of larger markets, that's where they've done well, with plenty of stores in Texas metros. OTOH, they've shrunk to almost nothing in St Louis (where they started out in just about every mall) and Kansas City among other places. I would have expected them to do better in Atlanta than they have----Atlanta is sort of ground zero for national chain retail of any kind and the operations don't have to be very distinguished to succeed. I doubt they would do well in LA or the Bay area.
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Re: Macy's Closing 10 Stores in January 2022

Post by bryceleinan »

Perhaps @storewanderer would know more about this than I would… I couldn’t figure out why Macy’s didn’t take the opportunity to consolidate the two Reno buildings at Meadowood Mall plus the furniture store across Virginia when Sears closed, and left a big box. I haven’t been to Macy’s in years, but I would have thought they could have fit in the building… not sure if this is the case in other areas.
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Re: Macy's Closing 10 Stores in January 2022

Post by Romr123 »

buckguy wrote: December 6th, 2021, 5:34 am Dillard had no trouble merging Mercantile, although as with Higbee (an upper middle brow store) they didn't do so well with their northern markets. Dillards niche seems to be sunbelt malls--in terms of larger markets, that's where they've done well, with plenty of stores in Texas metros. OTOH, they've shrunk to almost nothing in St Louis (where they started out in just about every mall) and Kansas City among other places. I would have expected them to do better in Atlanta than they have----Atlanta is sort of ground zero for national chain retail of any kind and the operations don't have to be very distinguished to succeed. I doubt they would do well in LA or the Bay area.
Yeah, it's pretty laughable how weak they ended up in the northern markets---Higbee was independent, Stix Baer and Fuller was ADG, and both were upper-middle, full-line when Dillards took them over...believe they both stayed full-line for about 15 years (St. Louis stores even had food service, travel service, furniture until about y2k) but just dwindled to nothing. They do ok in Toledo (took over Lion....Mercantile) with a new-build store out at Burnt Timbers in Maumee/Perrysburg along with the old store at Franklin Park. I guess they couldn't take on Jones in KC (Mercantile) due to antitrust which ended up with May. I think Mercantile in Kansas City and Denver (Joslin's) were a half-step above their smaller-market stores--when I lived in KC in the early 90s Jones seemed to have the formal wear/bridal market sewn up). We shop there in Toledo very occasionally (they do have nice men's big and tall), but their home merchandise is dire, dire, dire. They seem...unsophisticated. Like you'd expect a store based in Little Rock to be. Like you'd expect a Walmart department store to be...
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Re: Macy's Closing 10 Stores in January 2022

Post by Super S »

I really have to wonder how well the furniture stores are doing. Clackamas Town Center on the edge of Portland has two Macy's. The original location is a former Meier & Frank they acquired, and the other is a former Montgomery Ward which is now a furniture store. (both are two-story stores) Last time I was in the mall I noticed that part of the furniture store on the second floor had been converted to a Backstage store, which really looked odd and out of place, as this portion was closest to the store's mall entrance. I have never seen more than a handful of customers during the times I have walked through the furniture store.

They don't have much more thinning out to do around Portland...that Tanasbourne store (which seems out of place) is still a likely candidate for closure though as it is pretty close to the Washington Square location.

I still am skeptical about that tired-looking store in downtown Salem, which pre-dates the now-closed Lloyd Center location by 4 years, but is the only Macy's left after the Lancaster Mall store closed. Salem Center has lost both Nordstrom as well as JCPenney in recent years, but does still have Kohl's.

Here in Washington....

The store in Puyallup, WA is one that I think could go either way. While it is somewhat close to Tacoma Mall, Tacoma Mall is an aging mall and some redevelopment has started with the closure and demolition of Sears. The mall in Puyallup actually has been somewhat busy every time I have been there which might work in that store's favor.

Olympia is the only Macy's between Vancouver and Tacoma. Not sure about what the plans are there.

I still think we will see those huge 1960s era stores at Southcenter and Tacoma Mall downsize at some point. They seem to be doing ok but the stores are definitely aging a bit.
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