Macy’s has put a portion of its Chicago Loop flagship store up for sale, Chicago Tribune reports. A request from Retail Dive to Macy's for further details was not immediately returned.
The eighth through the 14th floors of the building, some 700,000 square feet, up for sale could fetch as much as $130 million, according to the report. The retailer plans to preserve the iconic Walnut Room, the restaurant introduced by founder Marshall Fields in the 19th century that has remained an iconic emblem of the gilded age.
The move is part of a reduction in store count aimed at slimming down operations and cashing in on the department store’s significant real estate holdings. In March the company sold its downtown Minneapolis location, a historic structure similarly from the department store heyday, for $59 million in cash to 601W Companies, which is planning a mixed-use redevelopment.
Macy’s Chicago Loop location serves as a symbol of the company’s massive expansion at the turn of this century, taking over the Marshall Field flagship, to the consternation of many Chicagoans. To this day, the store is still referred to by many as “Marshall Field’s,” the department store founded in 1852 by the man credited with the slogan “Give the lady what she wants!”
That takeover was ultimately detrimental to Macy's, according to Nick Egelanian, president of retail development consultants SiteWorks International. "The Chicago look store, a beloved flagship Marshall Fields store was particularly hard hit when it was reflagged as Macy's," Egelanian told Retail Dive in an email on Tuesday. "More importantly, it represents one of many valuable big city prime real estate assets. This continues a trend that we saw with Sears first and affirms Macy's stated strategy of creating from its most valuable real estate assets."
In 2005, department store operator Federated Department Stores (which changed its name to Macy’s in 2007) bought St. Louis-based The May Company, which itself had been amassing a series of department stores and retail chains throughout the West and Midwest, including most of the stores held by Dayton-Hudson, the parent company of a smaller discount chain called Target. In the wake of the deal, Federated crowed about its new juggernaut of “950 department stores, along with approximately 700 bridal and formalwear stores,” and Dayton-Hudson rebranded under the Target aegis.
That acquisition is the root of Macy’s troubles today, Egelanian has told Retail Dive in the past. The takeover of so many department stores didn't just leave Macy's with too many locations over a wide swath of the country (though that's part of the problem). As Macy's gobbled up, Pac-Man-style, department stores that were once thriving local retailers deeply embedded in their respective communities, it made them merely cogs in a machine, stripping away their local identities and connections while offering shoppers a homogeneous customer experience with few if any regional differentiators.
Macy’s is slowly but surely dismantling that expansion, and is destined, says Egelanian, to be a significantly smaller retail company with locations concentrated on the coasts.
"While the sale shores up Macy's balance sheet, it can should also be viewed as of a sign of things to come," he said Tuesday. "With total department store industry sales now at less than $60 billion annually and continuing a decades-long decline, we are witnessing the slow death the department store industry and most of the malls they occupy — a fading symbol of a bygone American way of life and commerce."