The Fate of the 2 Shuttered Macy’s Stores in San Francisco

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The collapse of brick-and-mortar retail becomes a real-estate question.

Caught up in the middle of the brick-and-mortar retail meltdown, Macy’s announced wave after wave of store closings. The 100 store closings it announced in August 2016 included Macy’s Men’s store in San Francisco and its store at Stonestown Galleria in San Francisco. Macy’s owned the buildings of both of them. This will bring Macy’s store count in San Francisco from three to just one store.

That’s how bad the meltdown is!

Macy’s is symptomatic for the brick-and-mortar retail sector. There have been thousands of store closings across the US over the past two years. So what will happen to the buildings and malls when big anchor stores are shuttered? Other locations may not be so lucky – if that’s the right word – as the two Macy’s locations in San Francisco.

In January 2017, Macy’s sold its 280,000-square-foot store at Stonestown Galleria for $41 million to mall REIT General Growth Partners, since renamed GGP, whose shares have plunged 26% since the end of July 2016. According to the San Francisco Business Times, which has obtained the plans submitted for the project, GGP is planning to redevelop the store into something – again the scary words – different this time

GGP is planning to subdivide the location into a multiplex cinema, a grocery store, and multiple smaller retail spaces and restaurants. So let’s see how easy it is going to be to make this work.

A multiplex cinema is a brick-and-mortar installation that competes with streaming videos, Netflix, Amazon, DVDs, bootleg versions, everyone and his dog, and other movie theaters.

According to The Numbers, which tracks data on the movie business:

  1. The number of actual movie tickets sold in the US peaked in 2002 (not a typo) at 1.577 billion tickets. By 2016, the number of tickets sold had dropped 18% to 1.301 billion.
  2. But ticket prices soared by 49% over the period, from an average of $5.81 in 2002 to $8.65 in 2016 (more in San Francisco).
  3. Due to higher ticket prices, ticket revenues rose 23% from $9.16 billion in 2002 to $11.29 billion in 2016. But even price increases haven’t been enough: since 2012, revenues are up only 1.9% in total. In 2017 so far, revenues are flat with 2016.




On a side note, this is precisely why companies, the Fed, and mainstream economists cited in the media clamor for more inflation: price increases allow companies to inflate revenues and profits even though they actually sell less. And consumers whose wages don’t keep up with those price increases, cut back and go to the movies less often but still pay more.

So the Stonestown’s future brick-and-mortar multiplex movie theater is going to face this environment of slowing ticket sales and relentless competition from online movie sales.

The future grocery store faces other dynamics that are tough and getting tougher: the entire grocery store sector is caught up in price war. Big German discounters Aldi and Lidl are expanding in US. Amazon is muscling into it via its purchase of Whole Foods. Online grocery sales are gradually gaining momentum. Yet adjusted for inflation, food sales in the US have been flat for the past six years.

And chain restaurants, the most likely type of restaurant tenant in a mall, are going through their own recession that has now lasted 15 months and may be structural.

So challenges abound for the future use of Macy’s old Stonestown store. Brick and mortar retail – whether clothes, movies, or groceries – is going to be tough.

The 263,000-square-foot eight-story building of Macy’s Men’s store faces a different fate. It’s in the Union Square area in the center of San Francisco, in a prime location. Five floors used to be occupied by the Men’s store. The top three floors are office space that was occupied by Macy’s West Coast headquarters, which was shut down in 2012. The office space has remained vacant ever since.

In November, Macy’s sold that building for $250 million to Blatteis & Schnur and Morgan Stanley Real Estate Investing. The deal closed in February. The property will be redeveloped into a mixed-use retail destination with updated architecture.

The new owners intend to redevelop the building into art galleries, high-end restaurants, and flagship retail – with Union Square being San Francisco’s flagship retail area. The upper floors will house office space. And as Bisnow put it, “A rooftop amenity with panoramic views also is under consideration.”

“We hope to create a must-visit experience where fashion, food and commerce come together within a multi-level, indoor/outdoor environment,” Blatteis & Schnur co-chairman Dan Blatteis said. They expect to complete the redevelopment in 2021. The area swarms with locals working in the area or using the BART station nearby, and with tourists itching to spend money – unlike Stonestown that only a few errant tourists might stumble across.

The fate of these two buildings shows how buildings can find a second life when big retailers shutter stores. But it won’t be easy, and it will only work for some locations. There are other Bay Area examples.

In 2014, Sears sold its six-story 85-year-old art-deco building in downtown Oakland for $25 million to Lane Partners, a Menlo Park real estate company, which sold it to Uber in 2015. Uber has started extensive renovations and planned to move its headquarters along with 2,000 to 3,000 employees from San Francisco to the remodeled building. These plans have now been scuttled. As of March, Uber might only move a couple of hundred people to the Sears building; the rest of the building will be leased to other companies.

These locations are in expensive densely populated areas. The property will always be valuable – though maybe less valuable than today. And these buildings will always find some use once redeveloped. But class B and C malls in outlying areas might not have that luxury. Their buildings may have to be torn down before the mall can be repurposed into something else, such as housing, stadiums, or overflow parking lots for car dealers that sit on too much inventory. Or vacant land, hoping for better days.

Investors who currently own those malls with an iffy future are losing the revenue stream as retail tenants shutter stores and go bankrupt to get out of their leases. Malls are highly leveraged. That debt typically comes due after ten years – much of it over the next few years. And if buildings have to be torn down, the land value alone might not be much of a consolation for the creditors that will end up with these properties.

Sears Canada goes bankrupt, closes over a quarter of its stores, lays off 2,900 people. Shareholders rue the day. Read… Sears Canada Melts Down




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  83 comments for “The Fate of the 2 Shuttered Macy’s Stores in San Francisco

  1. Franz Staugler
    Jun 26, 2017 at 12:46 am

    The new uses sound a LOT more exciting to me than a Macy’s so I see it as a creative destruction.

    • Jun 26, 2017 at 12:54 am

      The Macy’s Men’s store was terrible. And it’s in a great location. So anything will beat the old deal. There will be a lot of well-located retail spaces that find good new uses.

      Yes, brick and mortar retail real estate is going to go through a lot of creative destruction over the next few years. And some of it just destruction. But current mall creditors, especially those of B and C malls, are deeply worried they might end up on the “destruction” side of the creative-destruction equation.

      • Meme Imfurst
        Jun 26, 2017 at 8:37 am

        Wolf, I saw in DC, Baltimore, Richmond, Miami, Savannah, and in Houston, when the anchor stores close, be it on a boulevard or mall, the neighborhood closes too. The area becomes a blight and crime rises, litter on the streets, deserted sidewalks and parking lots. Not pretty for anyone to see, but no lessons learned.

        You mention new blood coming in with high hopes. and indeed there will always be those who believe their idea will succeed where others failed. But, the slogan ‘it is different this time’ can be a very hard companion when the front door stays closed all day long and the nail biting begins.

        I feel that the flee markets can be a breading ground for new entrepreneurs, I have seen it. But crossing over from a simple stall to four walls can be daunting, expensive, and plain scary Flee markets are also under attack by municipal bodies (right where I live) for many reasons (taxes, appearances, traffic, management) and I ask if this nursery is domed as B & C malls are, then retail may be more dead than it already appears.

        • Frederick
          Jun 26, 2017 at 10:16 am

          “breading” ground?

        • VegasBob
          Jun 26, 2017 at 2:01 pm

          I think he means ‘flea markets’ and ‘breeding ground’…

      • Ricardo
        Jun 27, 2017 at 9:27 pm

        Summary: the malls are unpleasant and unsafe places and THAT is why they are dying and why they will die.

        Westfield Shopping Center, June 25, 2017; your mall’s future just began. June 25 was just a rehersal. Are the junkies still using the nursing area in the basement to shoot up? or has that dirty little secret been corrected?

        Tourist with money to take BART should sue the hell out of any travel agency providing such reckless advice. The LAST time I rode BART, I saw a man crapping onto the seat and gloating while he did it. And hundreds of other bad incidents preceeding that.
        BART phshh.

        MUNI: me alone = ok. me with my preschool child = tough guys from the slum getting nasty. Its actually disgusting even when I rode it solo. Feces and urine, eww!

        Union Square
        The Knock Out Game is alive and well in San Francisco but don’t expect any record of it.
        Flash Grabs are common too. Did I mention the abundant quantities of feces and urine?

        The malls of America will die because the political elites will not allow the population to be safe and it appears that the merchants are going along with this suicidal policy and so they shall certainly fail.

        Hmm, ride a feces infested train and risk an unprovoked and violent attack by “youths” or shop online or not shop at all…. figure it out.

        Spoiler alert! It ain’t safe even if you drive and pay the parking fees but don’t expect any accurate statistics to be available – they’re not.

        on a brighter note, I love your work, Wolf.

        • Anon
          Jun 28, 2017 at 11:09 am

          Unfortunately, all true. The quality of life in the Bay area has declined considerably in the 40 years that I have lived here. But there have even been shootings in the recent past in Toronto’s Yorkdale Shopping Mall. So it is not just a San Francisco problem or even just an American problem.

        • Green Rock
          Jun 28, 2017 at 6:12 pm

          Maybe this will be moderated out, but what can we expect in a country that spends nearly all it’s resources on war? Brisbane, Australia, has no litter, immaculate transit, no street people, and no night crime.

  2. matt
    Jun 26, 2017 at 1:14 am

    From what I have been reading Seritage has been converting old Sears stores on the east Coast in Wegman’s and other useful types of stores and getting good prices for them sometimes double or more what Sears was paying. Still the Malls they are leaving behind along with JCP are now becoming ghost towns

  3. tgsn
    Jun 26, 2017 at 1:23 am

    Wolf, your first paragraph needs corrections: The 68 stores that Macy’s is closing are of those 100 stores that were announced in 2016. In other words, the company just named the 68 of those 100, and the rest will be announced later. Also, Macy’s will lease back the Stonestown location, so it will have 2 stores in SF.

    • TCG
      Jun 26, 2017 at 11:02 am

      I heard that Macy’s at Stonestown is only leasing back the store until the company that bought it can work through all the things they need to do before actually breaking ground on the new project.

      While there might be 2 stores as of right now, the lease back is only short term for a year or two, not something to expect to continue long term.

  4. Jim Graham
    Jun 26, 2017 at 1:56 am

    “”GGP is planning to subdivide the location into a multiplex cinema, a grocery store, and multiple smaller retail spaces and restaurants. So let’s see how easy it is going to be to make this work.””

    THAT will fly like the proverbial lead balloon. It has not worked around here in Akron, or in Cleveland, not in Nashville – or just about any other town I have been in over the last 5 or 10 years. Even drive-ins are going the way of the dodo. Could I be wrong about California??

    “”Macy’s sold its 280,000-square-foot store at Stonestown Galleria for $41 million”” = $146 a square foot – what kind of rent will it take to break even??

    ——————————————————————–

    “”The 263,000-square-foot eight-story building of Macy’s Men’s store faces a different fate. It’s in the Union Square area in the center of San Francisco, in a prime location.””

    At $250 million (= $950 per square foot – – not including updates and renovations) – what kind of rent will it take to break even?? Over how many years???

    • Frederick
      Jun 26, 2017 at 2:16 am

      Jim NO you’re probably right Who wants to eat at a restaurant in an old mall anyway and movie theatre patrons are going the way of the dodo bird They need to convert the place into a homeless shelter or bomb shelter On second thought nix the bomb shelter It is California after all

      • chip javert
        Jun 26, 2017 at 2:54 pm

        Well, I certainly want to pay $10+ (not including snacks) to go to a cineplex with sticky floors, smells like old popcorn, and has lots of teenyboppers talking on cell phones.

        Maybe I can even pay $10 or more for a Coke & popcorn.

        Oh yea, and I get to see (and almost listen to…) a crap movie!

        Wow!

        Yawn. I’ve decided to go to Europe instead…

    • Jun 26, 2017 at 8:29 am

      Yes, that’s San Francisco. RE prices are strangling many businesses. But if it’s a good location, you’ll probably find someone who’ll give it a shot for a while.

    • Rates
      Jun 26, 2017 at 9:41 am

      You can probably throw another Apple store there. They can afford the rent and I am sure it will be profitable.

    • TCG
      Jun 26, 2017 at 11:13 am

      I don’t know about the restaurants, but the Trader Joe’s already in the Stonestown mall is always oppressively crowded. This mall is near SF State and lots of students shop there. In addition, for the large residential neighborhoods west/nw of here the only real grocery store is a large, but rather unappealing Lucky on Sloat Blvd aside from a small Chinese supermarket.

      I think if the grocery store is appealing and competitive with TJs, which by SF standards has pretty reasonable prices and quality, it will attract shoppers.

      I know this neighborhood pretty well since I used to live in the Parkside, not that far away.

      • TCG
        Jun 26, 2017 at 11:17 am

        I should add there are a couple Safeway stores further north or east and neither is particularly appealing because of small size and older buildings aside from their ho hum selection of goods.

  5. raxadian
    Jun 26, 2017 at 2:34 am

    Restaurants always go in crisis when the economy goes down and there are way too many restaurant in the big cities. A lot of Chain Brick and mortar stores will die, leaving only a few left. Why Amazon is muscling itself in a business with only 1% to 2% of profit at most? Probably to end firing as most people it can in the long term and automate as much as they can. But also in the long term, it might end being a bad business for Amazon due to the hate on surge pricing.

    Then again Amazon has been scamming people for years and is still going strong, so whatever.

    • walter map
      Jun 26, 2017 at 8:52 am

      Online retail only partially accounts for the decline of brick and mortar retail. For the majority of the explanation one must look elsewhere.

      – Retail oversaturation
      – Inflated prices for CRE
      – Inflated prices for residential real estate
      – Wage deterioration for the general population
      – Deteriorating labor participation
      – Inflated costs for student loans
      – Inflated costs for medical services
      – Diversion of income into debt servicing
      – Lack of household formation
      – Changes in spending habits, for example, cars instead of clothes

      It’s hard to get reliable statistics to form an accurate picture because so many of them are fudged and/or subject to interpretation.

      Interestingly enough, resale seems to be increasing even while conventional B&M retail sinks. For example, Goodwill Industries alone is now a $5 billion/year operation, and certain secondhand chains are adding locations.

      https://www.narts.org/i4a/pages/index.cfm?pageid=3285

      • chip javert
        Jun 26, 2017 at 3:25 pm

        Walter map

        At 4.5% you consider student loans overpriced? With a 25% default rate?

        Heres a deal for you: take your own hard earned cash (not taxpayer money) and loan it out to a bunch of 18-year olds at less than 4.5%.

        Come back in a year and tell us how rich you are.

        Double dare you.

        • Hiho
          Jun 26, 2017 at 3:51 pm

          It is not about the interest but about the total sum. 100.000 $ or whatever are your futurless youngsters paying right now in order to study is way too much.

          How on the earth are they supposed to repay this shit, let alone start a family with starbucks and amazon salaries.

          If you cannot see that, you have a problem.

        • chip javert
          Jun 26, 2017 at 4:10 pm

          Hiho

          As a retired CFO, I definitely see at least part of the problem. And letting 18-year-olds borrow $1T+ ($1,000,000,000,000) without parental guidance will not solve it (frankly, all it does is let colleges & universities charge more).

          We won’t even talk about the quality of the product it buys.

        • Tim
          Jun 26, 2017 at 6:36 pm

          Chip. It’s guarantees by the government. It should be no more than the 10 year.

        • Suzie Alcatrez
          Jun 26, 2017 at 10:40 pm

          18 year olds? Try 17. Students loans are the only contracts children under the age of 18 can legally enter.

        • walter map
          Jun 26, 2017 at 11:08 pm

          “Come back in a year and tell us how rich you are.”

          I let the foundation finance promising young people without my supervision. What else ya got?

        • chip javert
          Jun 27, 2017 at 10:33 am

          What more do you need than 25% default rate on $1T outstanding?

        • chip javert
          Jun 27, 2017 at 10:42 am

          Oops – I’m wrong: $1.3T outstanding.

          Walter, the $1.3T has to come from somewhere (taxpayers), and it’s granted with an explicit (called a contract) expectation that it gets paid back.

          Whatever foundation is doing the funding of promising students has imposed a huge risk on taxpayers as well as tangible damage to a lot of students as they struggle with repayment.

          University administrators, on the other hand, seem to have benefited handsomely.

  6. Lee
    Jun 26, 2017 at 5:29 am

    Bricks and mortar related: retirement villages in Australia – a report of how they make money.

    Interesting, but disgusting read. There is one of those retirement villages not too far from where I live and they are asking from A$385,000 to over A$510,000 for these ‘units’. Other companies also have a couple of large retirement villages located nearby as well.

    SEE:

    http://www.theage.com.au/business/banking-and-finance/aveo-shares-sink-on-allegations-of-poor-treatment-20170626-gwyi7d.html

    http://www.smh.com.au/interactive/2017/retirement-racket/the-price-of-freedom/

    http://www.smh.com.au/interactive/2017/retirement-racket/the-get-poor-quick-scheme/

  7. Gershon
    Jun 26, 2017 at 6:25 am

    As ‘Murica sinks deeper into IDIOCRACY, theater-goers have to put up with a range of rude behaviors including parents who let their kids kick the seats in front of them, people texting or looking at cell phones during movies, and incessant jabbering by kids and teenagers. Add in high ticket prices, and there are very few incentives to go to the local cinema, with the possible exception of small indy theaters that tend to show titles that have little appeal to the typical low-brow ‘Murican theater patron.

    • Rates
      Jun 26, 2017 at 9:48 am

      I agree with this. The quality of movie goers have gone down dramatically over the years.

      • tony
        Jun 26, 2017 at 10:55 am

        The quality of movies has gone down 2ooo% more then the quality of people,but then again people today are not much better then the movies.

        • josh
          Jun 26, 2017 at 3:40 pm

          sadly, the low quality of the movies is dictated by the economics. there is no room for small film middle level films in the theater any more. only blockbusters justify the cost of distribution. international sales are a must. sophisticated dialogue is a killer because it doesn’t translate well especially in a cross-cultural context. global brands sell. that’s why everything is a sequel or based on an existing brand like a comic book. most of the interesting stories are now straight to video.

        • chip javert
          Jun 26, 2017 at 4:12 pm

          Gee, you’d think for $200M you’d get something you could watch without having to hold your nose.

        • Ethan in NoVA
          Jun 26, 2017 at 5:19 pm

          Theatres are digital now. Movie distribution is literally cheaper than it’s ever been. $100 hard drive just replaced the expensive reel of film.

          Just saw a movie the other night. Overpriced, color graded into all teal and blue, but the audience behaved well.

    • IdahoPotato
      Jun 26, 2017 at 9:55 am

      And that horrible, relentless crunch of caramel popcorn in the seat next to you. Anyone who puts caramel on popcorn should be … never mind.

    • Kent
      Jun 26, 2017 at 9:59 am

      I haven’t been to a movie theater in 8 – 10 years. Long enough ago that I can’t remember exactly when. I recall the tickets, some popcorn, and coke for two were like $25. I can’t imagine that someone is going to make a movie that is so good in a theater that I’m going to spend that much extra to watch it.

    • Frederick
      Jun 26, 2017 at 10:21 am

      Gershon I understand Haven’t been to a cinema since 2006 actually and it was East Hampton cinema and when leaving I was astounded that the couple in the row in front of me was Steven Spielberg and his wife 90 percent of the crowd were over 60 in the off season

    • kam
      Jun 26, 2017 at 12:20 pm

      Theaters have priced themselves out of business. $8 for a ticket, $10 for popcorn and watered pop and soon $40 bucks doesn’t cut it for you and your gal.

      Add to the fact that maybe, maybe 1 in a 100 movies are not simply re-hash of the same old theme and you get stagnant/declining interest in a shitty product.

      • Pavel
        Jun 26, 2017 at 4:20 pm

        Not to mention having to put up with kids on their smartphones sending texts or updating their bloody facebook page.

        I’m much happier watching movies in the comfort of my home :)

        • Ethan in Northern VA
          Jun 26, 2017 at 5:22 pm

          When I watch movies at home I tend to play with my smartphone and read WolfStreet.

          I told my buddies the other night, they should just have certain showings where cell phone use and talking is welcomed. MST3K style.

    • Sutter Cane
      Jun 26, 2017 at 2:30 pm

      This is why the Alamo Drafthouse out of Austin is the only theater chain in the country that is expanding – they actually enforce their no talking/texting rules and try to make the experience of seeing a movie pleasant. I never go to another theater for this reason.

      Unfortunately, they can’t do anything about the quality of current movies. Doesn’t matter if they provide a superior viewing experience if the film is garbage. Who cares if the audience sits in silent, rapt attention during a Transformers movie?

      • Suzie Alcatrez
        Jun 26, 2017 at 10:42 pm

        AMC is expanding. They recently bought out Carmike theaters.

        Alamo Draft House is a franchised.

    • Old Farmer
      Jun 26, 2017 at 3:07 pm

      I don’t go to a cinema primarily because the sound is much too loud. Maybe that’s to cover up people talking. Despite my age, I have excellent hearing (listening not so good . . . )

      • safe as milk
        Jun 26, 2017 at 3:34 pm

        it’s not your age. my daughter actually cried once when she was about nine and begged me to leave a loud theater. the few times that i have gone to the movies in recent years, i stuff pieces of napkins in my ears like i would in a rock concert.

  8. Toyota TRD
    Jun 26, 2017 at 6:36 am

    I’m still confused on Italy banks , did the banks got a bailout or did they just close

    http://www.zerohedge.com/news/2017-06-26/italy-bank-bailouts-send-european-global-stocks-higher-gold-flash-crashes

    Above link is saying bailout

    • Jun 26, 2017 at 8:42 am

      The banks closed. The Italian taxpayer will be paying €17 billion to bail out senior bondholders and protect deposits. Stockholders and junior bond holders got wiped out. Intesa picked up the good assets (the loans that are still performing, hopefully) and the deposits (liabilities), plus €5 billion of that taxpayer money to compensate it for the “good” assets that might be bad after all (defaulted loans).

      • walter map
        Jun 26, 2017 at 8:59 am

        “The Italian taxpayer will be paying €17 billion to bail out senior bondholders and protect deposits.”

        Money, as usual, flows uphill, and, also as usual, the FIC cannibalizes the real economy.

        Meanwhile, U.S. equity markets continue their skyward surge.

        http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=djia&sid=1643&o_symb=djia&freq=9&time=1

      • Toyota M2
        Jun 26, 2017 at 10:35 am

        Thank you, I was having hard time understanding, you clearly explained. There was no bail-in in this case, therefore all customers got their money back

        • Jun 26, 2017 at 1:16 pm

          Yes, no bail-in of depositors. Most of them had deposit insurance anyway. But there was a bail-in of equity holders and junior bondholders.

        • Kent
          Jun 26, 2017 at 1:25 pm

          IMHO, bailing in depositors destroys banking as an industry.

        • chip javert
          Jun 26, 2017 at 3:48 pm

          Bailing in depositors is undoubtedly drastic, but is does cause people to pay attention to the bank they do business with.

          To the extent this would actually cause bank managers to “behave”, this would be positive’.

          Unsophisticated, poor people losing there hard earned money – not so good.

          This is why we have government & regulators, and why it’s infuriating when they fail to do their jobs.

  9. gert7to3
    Jun 26, 2017 at 8:29 am

    A report from Travers City, MI, a small city in NW lower Michigan. K-Mart has closed one of its two stores in the area and the remaining one will close as well. The Sears store is closing. That will leave Younkers as the only big store in the Cherryland Mall. Most of the small shop space there is vacant as well. Radio Shack and MC Sports are gone.

    OTOH Costco is building a store near the airport. A new Meijers and a Tractor Supply opened on the east side of town. The Meijers on the west side of town remains their busiest store in Michigan. Menards, Home Depot and Lowes all look busy.

    There is some light industry and a lot of fruit based agriculture. Hop farming and wineries are also big business. However, wages are low, people think $12/hour is good. Housing costs in TC itself are rising, but there is 25% poverty in neighboring counties.

    • JimH
      Jun 26, 2017 at 9:42 am

      Traverse City doesn’t seem to be typical of the area. It has a huge if seasonal influx of tourism/summer residencies that surrounding (inland?) counties don’t.

    • elysianfield
      Jun 28, 2017 at 10:37 am

      Unsophisticated, poor people losing there hard earned money – not so good.

      This is why we have government & regulators,

      Chip,
      This is why we have…police.

  10. Wilbur58
    Jun 26, 2017 at 9:18 am

    Hi Wolf,

    How long have you lived in SF?

    I recall the Union Square Macy’s being a good one, but that was over 14 years ago.

    In LA, the Century City Macy’s was a disgrace, but how now been replaced and modernized. (It’s at the other end of a complete revamp of the entire mall.) The new one looks to be a winner.

    • Jun 26, 2017 at 10:29 am

      11 years. That store was dark and neglected, without anyone working there it seemed… go across the street into the women’s Macy’s store, and it’s a different world. That’s how department stores don’t give a crap about men. And that’s one of the reasons why I now buy nearly all my stuff online.

      • nick kelly
        Jun 26, 2017 at 10:40 am

        I think dept stores don’t give a crap about men because it’s mutual.
        But this comes from someone who’s never been asked for the name of his tailor.

        • Jun 26, 2017 at 1:37 pm

          Your theory may be correct.

      • William
        Jun 26, 2017 at 1:20 pm

        Have you checked out Wingtip, Brooks Brothers, The Hound, Cable Car Clothiers? Those are my regulars when I visit SF.

        • Jun 26, 2017 at 1:40 pm

          I used to buy my suits from BB. Good specialized service, in my experience. They’d spend time with you and advise you properly. And you’d pay for it too. There are some other specialized stores that cater to men and do well. But none of them are department stores.

        • Sutter Cane
          Jun 26, 2017 at 3:27 pm

          I find Nordstrom does an excellent job with menswear and custom tailoring.

        • chip javert
          Jun 26, 2017 at 3:52 pm

          “Suits”?

          What’s that (and I’m 70+)?

  11. TJ Martin
    Jun 26, 2017 at 9:42 am

    To my mind Macy’s is the prime example of a retailer trying to ‘ punch above its weight class ‘ in the futile attempt to dominate an ever fluctuating retail market . The regressions to what seems to be their imminent destruction going as follows ;

    When their sole store was in NYC and NYC only .. they were iconic and extremely profitable

    When they expanded outwards into a very select few ‘ key ‘ cities though some of their iconic status diminished their profits and overall cache increased .. bringing NYC style and shopping experience across the land [ sorry all you CA’ers but NYC is still the epicenter of US fashion .. and back in the day Macy’s customer service and shopping experience exceeded the very best the likes of Rodeo Drive had to offer .]

    But when they started going ‘ down market ‘ into smaller towns and cities trying to go head to head with the major discounters and local stores .. cutting customer service .. overloading the floor space with stock .. buying out filling competitors etc ..well … thats when they reached what I’ve come to call the Reverse Tipping Point : e.g. When you’ve gone so high the only way forward is … down .. as in straight down

    Which begs the question Wolf .. when is someone from the financial sector going to finally recognize the reality of the Reverse Tipping Point .. and write a goram book about that ?

    • chip javert
      Jun 26, 2017 at 3:55 pm

      TJ M

      Don’t know about the book, but I love “reverse tipping point” I’m stealing that right now.

    • Pavel
      Jun 26, 2017 at 4:23 pm

      I went into the main NYC Macy’s about a decade ago when I wanted some summer trousers. It had to be one of the worst shopping experiences ever… the help was almost non-existent and when I found someone he didn’t seem to care and didn’t know anything. Worst were the changing rooms — it was like they hadn’t been cleaned in months. Never went back.

  12. Petunia
    Jun 26, 2017 at 9:51 am

    The death of brick and mortar stores will eventually impact the value of the surrounding residential real estate. The NYC pictures of Madison Ave., you posted, are bound to make the Fifth Ave. and Park Ave. condos surrounding those empty stores less attractive. Maybe concierge service by high end businesses and online sales may take up some of the slack, but I doubt it.

    When I worked in NYC I hated working downtown because the lunch time shopping and eating options were terrible. I preferred to take jobs in midtown where I could run errands at lunch. Being near Saks and Bloomingdales had economic and time value to me.

    Even now I try to stay close to convenient shopping in choosing a place to live. Many people are buying in mixed use developments because they like the city feel of walking to the shops. When those shops close, and they are in two developments by me, the value of the housing surrounding them also has to drop. Brick and mortar contagion.

  13. Niko
    Jun 26, 2017 at 10:20 am

    “A multiplex cinema is a brick-and-mortar installation that competes with streaming videos, Netflix, Amazon, DVDs, bootleg versions, everyone and his dog, and other movie theaters.”

    Netflix, Hulu and all of the other video streaming companies are starting to experience disruption via the Amazon Firestick and a download software called “Kodi”. You can buy the Firestick and download “Kodi” and “add ons” and watch just about any movie and tv series for free, including those produced by Netflix, HBO, Starz and any other video streaming service.

    What is the old saying, ” What goes around….”

    • Anon
      Jun 26, 2017 at 3:44 pm

      I wonder how many Firesticks have been sold because they allow the downloading of Kodi and its related add ons.

  14. RD Blakeslee
    Jun 26, 2017 at 11:09 am

    “So what will happen to the buildings and malls when big anchor stores are shuttered?” – Wolf

    https://www.buzzfeed.com/mjs538/completely-surreal-pictures-of-americas-abandoned-malls?utm_term=.vs7jwNGGd#.ihpwNWyyL

    • chip javert
      Jun 26, 2017 at 4:01 pm

      WOW!

      That’s some serious photography!

      Question: one of the picture had an abandoned baby stroller – why? Were the parents in there so long the kid graduated from high school?

  15. unit472
    Jun 26, 2017 at 11:27 am

    My guess is Macy’s should have resurrected the I. Magnin store at the Union Square location. If you can’t make a go of it selling premium women’s fashions in Union Square it can’t be done. By the same token, if the venerable men’s clothing store, Jay Briggs couldn’t sell men’s clothing in downtown sF why did Macy’s think its men’s clothing store would fare any better?

  16. roger
    Jun 26, 2017 at 1:35 pm

    SF union square is just so boring so nobody wants to shop there. Was just there ,,,poor people hanging around the square,,terrible place. And hotels are so expensive around there ,,,for what ??

    • chip javert
      Jun 26, 2017 at 4:02 pm

      I’m guessing “demand”…

    • Anon
      Jun 26, 2017 at 4:06 pm

      You are quite right. Moreover, there are far more shopping choices than there used to be, in the suburbs and there is online shopping as as well. Walnut Creek’s Broadway shopping area is considered to be the second most successful suburban retail area in California, after Beverly Hills. Shopping choices in downtown Oakland have gone from bad to almost non-existant over the past four decades. At the same time, the dress code for men has also gone from suit and tie to casual for most office jobs.

      • chip javert
        Jun 26, 2017 at 4:16 pm

        Clothes from Oakland tend to come with bullet holes.

  17. Roman T.
    Jun 26, 2017 at 7:21 pm

    Movie goers are a diminishing demographic. Video games are more and more cinematic and video game market surpassed all movie watching long ago.
    Working those numbers you put up I get $1500/day/screen. Add some popcorn and soda and it’s still slim pickins’. Are theaters subsidized by studios??

    Those Macy’s stores won’t stay empty but the ideas to fill them don’t sound very good. Eventually they will probably turn into what SF has the biggest shortage of, which is housing. Or maybe a hostel.

    • Jonathan
      Jun 28, 2017 at 1:11 am

      Even I get jaded after 20 years of playing video games where true gameplay innovation is rare and stale rehashes with a new coat of paint are the norm. I would rather much watch a gaming stream for free then paying to play a $60 game that would play only once and never touch ever again. However, that’s still a better state of affairs than old school media.

  18. raxadian
    Jun 26, 2017 at 11:59 pm

    Movies have been done in all kind of conditions, even having the director pay it from his or her own pocket. Movies have been made buring bubbles crashes, during war, during food shortages. Even during epidemics!

    If anything more money increases the amount of trash movies. During Disney 1990-2000 era when everyone loved their animated movies they did a lot of direct to video movies and also a lot of TV series.

    Sure Disney Dinosaurs was fun and the Aladdin Tv series was great, but besides that?

    People still see and buy movies is just that watching movies at a movie theather has become a luxury.

  19. Cassandra
    Jul 8, 2017 at 11:22 am

    It looks like the economic canaries in the coal mine are giving up the ghost. Consumers are not spending more money, they are spending less.
    Given the increase in rent’s, health insurance and education the bulk of people have far less disposable income.

    It’s the Hollywood economy. Facades everywhere but nothing behind them. How can Tesla be worth more than GM? When the money printing
    stops, both the stock and housing market will collapse.

    Retail sales are NOT being made up for by online sales (and certainly not restaurants).

    We are in a depression-real business is collapsing but the stock and housing markets have yet to signal a point of recognition.

    They will. It is not different this time.

    Moraga going bankrupt?

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