Several Rob-May, Macy's Stores in Calif. to Close
Federated Department Stores Inc. announced that it will close more than 20 Robinsons-May and Macy’s West stores in Southern California after the December Holiday season, according to officials at the Cincinnati-based retailer.
The closures had been widely expected as one of the consequences of Federated’s $11 billion acquisition of The May Department Stores Co., which owns Robinsons-May. Federated shareholders approved the merger on July 13, but the companies worked on the deal for much of 2005. The merger was intended to create a $30 billion department store company with a national scope that would retail under the Macy’s nameplate.
The Robinsons-May stores slated for closure are in Torrance, Culver City, Glendale, Cerritos, Santa Ana, Escondido, Northridge, Thousand Oaks, San Buenaventura, Carlsbad, Arcadia, Santa Monica, La Jolla, Bakersfield and Rancho Cucamonga.The Macy’s West stores are in Riverside, San Bernardino, Lakewood, Mission Viejo, Montclair, Palm Desert and West Covina
More than 4,300 Southern California retail workers will lose their jobs when the stores close, but Federated Chairman Terry J. Lundgren said his company will offer positions to most of the workers and expects to retain all managers “in good standing.”
“It is important for associates of both companies to understand that we will be as sensitive and as caring as possible throughout this process,” Lundgren said in a company statement.
The company left open the possibility of reconsidering some closures and evaluating other stores as candidates to be turned into Bloomingdale’s, Federated’s luxury department store. The stores scheduled for closure are considered duplicate properties that could cannibalize sales from each other once the merger completes.
Shopping mall analyst George Whalin said he believes pain from the closures will be short-lived.He forecasted that no more waves of closures will follow this one and that most of the laid-off retail workers will find jobs quickly because the economy is good.
Big-box retailers such as Wal-Mart Stores Inc. and Sears Grand are good candidates to move into many of the empty properties, said Whalin, president of San Marcos, Calif.–based Retail Management Consultants.Many shopping centers will also parcel the big department store lots into smaller retail spaces. “This might be an opportunity for any mall looking for ways to reinvent,” he said.
Some of the candidates for store closures perplexed Jack Kyser, chief economist for the Los Angeles Economic Development Corp. Kyser questions the closure of the Robinsons-May at Victoria Gardens in Rancho Cucamonga, which he said has been considered a runaway success.
None of the Federated stores at South Coast Plaza—a Macy’s Home, a Macy’s Men’s, a Macy’s and a Robinsons-May—will be closed.
“I don’t think the whole story has played out yet,” Kyser said. “We’ll see more pins drop.” —Andrew Asch
