After a holiday season that left major retail chains reeling with disappointment, department store giants Macy's, Sears, and Kmart have announced a massive wave of real estate sales, closures and shutdowns, including one high-visibility closure in San Francisco.
It's no new news that department stores have struggled for a while, with a reported failure to adapt to current shopping trends causing losses quarter after quarter. This week, we're seeing the result of those losses, as 108 Kmart locations and 42 Sears locations announced closures Wednesday.
Though the few remaining Bay Area Kmart and Sears locations are untouched by this round of cuts, another floundering company's issues will have an impact on local shoppers, as Macy's also announced the closure of 68 stores and the loss of 10,000 jobs Wednesday, according to the Associated Press. As part of that reorganization, the SF Business Times reports, Macy's will be selling its Stonestown Galleria store to the San Francisco mall's operator, General Growth Properties.
That doesn't mean that the store will close right away, the AP reports, as they will "will lease back the Stonestown location for an undisclosed amount of time" until making way for a new tenant. So, a shuttering looms, but no one knows or is saying when, a cloud of certain doom sure to make the already fraught and spooky experience of shopping the deserted, messy, and oft-strange-smelling store all the more pleasant.
CNBC reports that "Macy's comparable sales fell 2.1 percent in November and December." The layoffs and closures are expected to "save the company an estimated $550 million a year starting in 2017. The company will use these proceeds to invest an additional $250 million in its digital business, as well as the growth of its Bluemercury beauty shops, Macy's Backstage off-price stores, and China," CNBC reports.
According to a press release sent by Macy's, closures and sales like this one are expected to "focus resources on strategic priorities, improve organizational agility and reduce expense" and the sale of the Stonestown property (and others) is "consistent with the previously announced real estate strategy."
It's still unknown what's next for the 280,000-square-foot Stonestown space Macy's will at some point vacate. When contacted by the Business Times, a General Growth spokesperson refused to comment specifically on their plans, but said "We have redeveloped, and are currently redeveloping, over 100 former anchor and big box sites throughout our portfolio over the past 5 years. The Macy's at Stonestown represents a further opportunity for us to add value to the property."
As previously reported, Macy's also sold its Union Square Men's Store, in a November deal with Morgan Stanley worth an estimated $250 million. The company says they will continue to lease the 120 Stockton Street property back from its new landlord for the next two years, as their main store is reconfigured to accomodate the men's department. That is, assuming that by the end of 2018 any department stores remain at all.
Previously: Macy's To Shutter Its Union Square Men's Store