Mag Mile Macy’s closes as retailer shifts to smaller stores
Flagship at Water Tower Place, owned by Brookfield, was struggling before Covid
The decision by Macy’s to shutter its 170,000-square-foot flagship store at Water Tower Place along the Magnificent Mile was months in the making, as the retailer struggled to overcome Covid restrictions and the turbocharged move to e-commerce.
Macy’s, which is shifting nationwide to smaller stores and larger fulfillment centers, will hold clearance sales at the decades-old location for up to 12 weeks before closing its doors permanently, according to Crain’s.
Early last year, the retailer triggered a one-year opt-out clause in its lease. It was around that time that Macy’s said it planned to close over 100 of its stores and cut 2,000 jobs.
A spokesperson said the Water Tower Place location closure was part of the company’s strategy to “right-size its store fleet,” according to the report. But it was struggling before the pandemic: According to Crain’s, the Mag Mile location’s reported revenue fell to $54 million in 2019, from $85 million in 2014.
The company said it would keep its locations open on State Street, along with several suburban shops, including ones in Old Orchard, Oakbrook, Woodfield, Orland Park and Hawthorn Court.
On its second-quarter earnings call in September, Macy’s CEO Jeff Gennette noted that “everything on the digital agenda has been accelerated.” The company unveiled its plan to open smaller, off-mall stores and fulfillment centers, while consolidating its current locations. The number of Macy’s locations decreased to 546 from 551 in the first quarter of 2019. In total, the company has 771 stores between the Macy’s, Bloomingdale’s and Bluemercury brands.
Brookfield Property Partners owns the 750,000-square-foot mixed-use Water Tower Place. Brookfield, which has itself struggled amid the pandemic, may be going private. This week, the real estate firm’s parent company, Brookfield Asset Management, announced a proposal to buy nearly $6 billion worth of shares of BPP that it does not already own.
[Crain’s] — Alexi Friedman