Macy’s Store Closures in 2017 Could Impact Central Ohio Malls
Macy’s announced several weeks ago that it has plans to downsize brick-and-mortar operations with the closure of 100 of its stores across the country. The individual store locations have not yet been announced, and are expected to be released sometime in early 2017, just ahead of the closings dates.
“Nearly all of the stores to be closed are cash flow positive today, but their volume and profitability in most cases have been declining steadily in recent years,” stated Macy’s, Inc President Jeff Gennette via press release. “We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand. We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations, as well as invest in growth sooner and more aggressively in digital and mobile.”
With seven stores located in Central Ohio, it’s likely that one or more could be on the chopping block, and a recent article from Business Insider has Columbus listed as one of the Top 10 cities where Macy’s has lost the most market share between 2014 and 2015.
Currently, Easton Town Center and Polaris Fashion Place each have a store, while Eastland Mall has both a regular store and a separate furniture store, and The Mall at Tuttle Crossing has two anchor stores with a third store for furniture located nearby.
“I don’t think we would be talking about Tuttle as a possible closing for Macy’s if it weren’t for that the fact that they are operating and leasing two stores there that they ended up with as a result of mergers in the early 2000’s,” stated Chris Boring, Principal of Boulevard Strategies, a Columbus-based retail and real estate consulting firm. “It is possible that both stores are profitable given the economic vitality of the Tuttle area and the surrounding affluent northwestern Franklin County and Union County markets. On the other hand, Macy’s could be even more profitable with only one Tuttle location — but are likely obligated by leases to keep both open.”
Boring added that he has been bearish on the long-term success of the Mall at Tuttle Crossing, which was one of the last traditional indoor shopping malls to open in the United States in 1997.
“Tuttle is vulnerable to competition from a new lifestyle center, similar to Easton but smaller in scale, on the northwestern side,” said Boring. “Polaris Fashion Place, staying a step ahead of the competition in its market, demolished a former Kaufman’s store and built an open-air lifestyle wing in 2007. I could see a similar idea working at Tuttle if Macy’s and the mall’s owner could work something out and if the mall’s owner is willing and able to invest the capital to make that happen.”
On the opposite side of Columbus, Eastland Mall has been through a number of changes over the past decade.
“Macy’s took over the 249,000 square foot store Lazarus store when Federated and Macy’s merged in 2003, going by the awkward moniker of Lazarus-Macy’s for a while before it was changed to simply Macy’s,” explained Boring. “Glimcher bought Eastland Mall in 2003 and announced plans to add a fourth 120,000 square foot anchor, Kaufmann’s. By the time the store was built in 2005, Macy’s had also merged with Kaufmann’s and it moved Macy’s to the new Kaufmann’s store in 2006. The old Lazarus-Macy’s store was demolished in 2009 for a new J.C. Penney store. Penney’s closed in 2015 but the structure remains.”
Boring speculates that whether or not the Eastland Mall Macy’s will close depends on whether or not it is profitable, whether or not the sales are trending upward, and how much the company pays in operating costs.
“My guess is that sales performance at Eastland is not good and declining,” he stated. “With Penney’s gone and Sears apparently on its last legs, the prognosis is not good. I think Macy’s will try to close this location if it is financially feasible for them to do so based on lease terms and the mall owner’s willingness to negotiate.”
Representatives at both Eastland and Tuttle were reached out to for comment last week. Samantha Brawand, Director of Marketing & Business Development at The Mall at Tuttle Crossing, referred questions directly to Macy’s, and representatives from Eastland Mall did not answer as of the time of publication.
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage as a preferred shopping destination for fashion, quality, value and convenience,” said Lundgren via press release. “This involves doing things differently and making tough decisions as we position ourselves to serve customers who have high expectations of their favorite stores, online sites and apps.”