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Macy's to close SF Union Square flagship store
Macy's will close 150 stores nationwide over the next two years, including its flagship Union Square store in San Francisco.
SAN FRANCISCO – Macy's will close 150 stores nationwide over the next two years, including San Francisco's flagship Union Square store.
Mayor London Breed said the Union Square store will close in the second phase of closures and that the store will remain open and employees will still have jobs until then.
It will also take time to sell the 400,000-square-foot property, Breed added, promising to work with the next company to move in.
On a conference call Tuesday, Macy's officials said 50 stores in the United States will close in the first year and the remaining 100 in the second year.
For many, Macy's is more than just a department store, it's a nod to shared cultural experiences. Mayor Breed described this move as a business decision by Macy's.
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Macy's is closing 150 stores nationwide, including San Francisco's flagship Union Square store
Macy's will close 150 stores nationwide over the next two years, including San Francisco's flagship Union Square store.
“But as someone who grew up in San Francisco, Macy's has always meant a lot to the people of this city,” Breed said. “Families came here to shop for the holidays. Many people in my community got their first job here or even had a job for decades. It’s hard to imagine Macy’s no longer being a part of our city.”
Union Square Alliance CEO Marisa Rodriguez expressed similar sentiments.
“Macy's will remain open and may remain open for years to come,” Rodriguez said in a statement. “In all likelihood, there will be a holiday shopping season and Macy's big tree in 2024.”
However, Rodriguez acknowledged that the announcement “hurts” during a conference call with investors on Tuesday.
“Macy's has been synonymous with Union Square for generations,” Rodriguez continued. “I believe we should work on a solution that allows Macy's to keep this iconic store open.”
It wasn't immediately clear what will happen to the 20 other Macy's in the Bay Area, such as locations in Concord, Santa Rosa, Pleasanton and Walnut Creek.
Macy's is the largest department store chain in the country.
In addition to owning 350 Macy's stores, it is also the parent company of Bloomingdale's and cosmetics store Bluemercury.
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City leaders emphasized that the shutdown, particularly in San Francisco, is not about safety. In fact, they pointed out, Union Square saw its lowest crime rate in years during the recent holiday season, and thefts are down 39% so far in 2024.
Rather, it's about profitability.
Macy's and Bloomingdale's sales fell year-over-year during the 2023 holiday season.
Ray Wimer, a professor of retail practice at Syracuse University, acknowledged that Macy's is in a difficult situation, especially given online shopping and competition, including Target and Walmart.
“They have tried to restructure and strategize to find a path to success in the future,” Wimer said. “There’s just so much competition right now.”
Wimer said if companies could create a shopping experience with smaller spaces, requiring fewer staff, customers would get a better experience.
“The really big department store is no longer as attractive as it once was in many areas of the country,” Wimer said.
A new CEO, Tony Spring, took over the company last year, and investors had threatened to take the company private if it didn't turn things around.
On the earnings call, Spring said he had identified 150 stores that the company described as “unsustainable” locations and that were not as profitable.
Spring said the company spent seven months diagnosing the company's problems and finding solutions to them.
Pro-Palestinian protesters unfurl a banner in support of Gaza at the Chinese New Year parade from the Macy's in Union Square in San Francisco. (February 24, 2024)
They surveyed 60,000 customers and said the Macy's stores that remain open will be renovated and given more resources, including more employees in the women's shoe and apparel departments.
It's the Macy's chain's second major downsizing since 2020 and the company will have 350 stores, just over half its pre-pandemic number.
As Macy's shrinks, Bloomingdale's will grow.
Spring said that while they will close 50 Macy's stores this year and another 100 by 2026, he plans to open 15 new Bloomingdale's stores and 30 new Bluemercury stores.
He said that was a sign that the company wanted to shift its focus to higher-priced luxury brands and the skin care cosmetics market.
San Francisco politicians took the opportunity to discuss this new “opportunity” and present their vision for the future Macy's location.
The mayor said the city's goal is to focus on the opportunities this creates and ensure the space is used for something “profitable.” She envisions the space as a permanent destination that will attract people.
Supervisor Aaron Peskin said he was “devastated” about Macy’s workforce reduction plan.
But he said he would like to see the property become a mixed-use space, including building a new sound stage in Union Square to attract world-class performances.
At nearby historic John's Grill, the news was devastating.
“We have guests who go to Macy's or John's Grill during the holidays. It’s a family tradition,” John Konstin said.
The restaurant has been here in Union Square since shortly after the great earthquake of 1906. They welcomed Macy's in the 1940s. The restaurant's current generation of owners regrets that Macy's and the traditions associated with it are disappearing.
“It will be interesting to see where this goes and we will welcome the next operators downtown,” Konstin said.