In a significant blow to San Francisco's downtown district, Macy's is set to close its iconic Union Square flagship store, which echoes a larger trend of retail withdrawals from the area. Supervisor Aaron Peskin broke the news, noting that the department store will stay open until the property is sold. The Union Square Alliance suggested that the store "could still be open for years to come," ensuring at least one more holiday shopping season and the return of Macy's great tree in 2024, as Aaron Peskin told ABC7 News.
This closure forms part of Macy's larger strategy to shutter 150 "underproductive" locations through 2026, a decision driven by dropping sales and an ongoing shift to online consumer demand. According to the San Francisco Chronicle, plans for the Union Square location include remaining open until at least 2025, with no clear buyer. Even though to the detriment of the downtown area's recovery, emphasized amid Mayor London Breed's reelection campaign, Macy's has resolved to undertake these closures in a strategic resizing move.
The announcement comes on the heels of other significant store exits, such as the nearby Nordstrom and the mass exodus of retailers from Westfield San Francisco Centre mall, documented by the Hoodline. These developments spotlight the city's struggle with commercial vacancies post-pandemic, a concern mirrored in the Union Square closures, where large spaces struggle to find tenants in the absence of big retail players.
The decline of such an established retailer in Macy's further marks another chapter of struggle for the city's centrality, already grappling with a 36% office space vacancy rate and a decrease in tourism. Amidst the tug-of-war with investor interests, Macy's CEO Tony Spring highlighted the company's intent to "accelerate our path to market share gains, sustainable, profitable growth and value creation for our shareholders," while noting the redirection of capital towards more profitable ventures such as Bloomingdale's and Bluemercury stores. The CEO's statements, reported by both the San Francisco Chronicle and ABC7 News, emphasize a lean towards smaller-format shops in new and current markets.
Mayor Breed, in statements obtained by ABC7 News, addressed the emotional impact of the impending closure, "As someone who grew up in San Francisco, Macy's has always meant a lot to the people of this city." She has maintained a proactive stance, engaging with retail, business, and real estate leaders to ascertain the long-term success of the site and continuing to portend solutions to entice fresh investment into the downtown area.
