Saks Fifth Avenue May Be Poised to Exit SF’s Union Square

The dominoes of department stores and boutique shops falling around San Francisco’s Union Square may include another luxury retail store: Saks Fifth Avenue.

Canada-based Hudson Bay Company, which owns Saks, appears ready to cut the cord for its appointment-only store at 384 Post Street when its lease expires in 2027, the San Francisco Chronicle reported.

The move comes after an affiliate of Hudson Bay, Saks Global Enterprises, picked up the Union Square flagship store from Neiman Marcus late last year at 150 Stockton Street during its acquisition of Neiman Marcus and its real estate properties for $2.7 billion.

The transfer of the six-story, 208,900-square-foot building at 150 Stockton assigned a new market value of $160 million, or $766 per square foot, according to public records and an unidentified source.

That left Saks, which for decades has leased a 136,000-square-foot building at 384 Post diagonally across the street from Neiman, vulnerable.

Saks Fifth Avenue faces an expiring lease in January 2027, Charlie McCabe, a locally based real estate investment broker, told the Chronicle. The department store’s ongoing tenure in that building “may be tenuous,” he said.

Saks pays more than $6 million a year in rent to landlord Lincoln Property, based in Dallas. Last summer, Saks laid off workers as it converted the store to “appointment only,” curtailing its retail clout in Union Square.

Kazuko Morgan, a veteran retail broker who specializes in leasing around Union Square, said that she was told Saks doesn’t plan to renew its lease — and hasn’t heard that Saks could move in with Neiman Marcus across the street.

“If Saks does exit the market, it’s not such a terrible thing today, since they have been appointment-only for months,” Morgan told the newspaper. “They’ve already diminished their presence.”

Lincoln Property and Germany-based Cara Investment bought the building in 2021 for $156 million, or $115 per square foot. They now plan to redevelop it as “mixed use,” Morgan said.

The loss of Saks could be inscribed into a larger retail tombstone for greater Union Square, once the city’s golden shopping district.

Nordstrom, which for decades anchored the mall at 865 Powell Street, packed up in 2023. Bloomgindale’s, which occupied more than 300,000 square-feet at the nearly empty San Francisco Centre mall, will close this month.

Macy’s, which for decades has occupied its three-building flagship store in Union Square plaza, plans to sell the property and close the doors of its only San Francisco store.

Other retailers that have pulled up stakes include Saks Off Fifth, Nordstrom Rack, H&M and Uniqlo, according to the Chronicle. Meanwhile, luxury retailers may be drifting over to historic Jackson Square.

This month, Ralph Lauren has returned to San Francisco with a new store at 441 Jackson Street, following an influx of luxury retailers like Paul Smith, Isabel Marant and Zimmermann.

— Dana Bartholomew