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Historic flagship Macy's store in San Francisco's Union Square among locations the company will close

Macy's Union Square store closure sends shock wave through San Francisco
Macy's Union Square store closure sends shock wave through San Francisco 07:21

The flagship Macy's location in San Francisco's once bustling Union Square shopping district is one of the stores set for closure in the wake of the company's Tuesday announcement that it would be closing 30% of its locations, city officials confirmed Tuesday.

The San Francisco Business Times broke the news of the huge downtown San Francisco store's closure Tuesday morning, citing an unnamed source with knowledge of the company's plans.

According to the report published by the Business Times, Macy's plans to keep the location at 170 O'Farrell St. in operation until it can find a buyer for the real estate that the company owns. The impending closure will impact around 500 jobs.  

Venerable flagship location

The Union Square Macy's is one of the retailer's largest and oldest locations. It has anchored the San Francisco shopping district for nearly a century since opened in early March of 1929 when the company was operating under the name O'Connor, Moffat & Co. 

Earlier Tuesday, the company went public with its plans to close roughly 150 underperforming stores over the next three years as the struggling retailer attempts to energize its business. 

The department store chain said it plans to focus on expanding its luxury brands, Bloomingdale's and Bluemercury. Macy's will shutter 50 stores over the next year. Last month, Macy's rejected a $5.8 billion takeover offer from investing firm Arkhouse Management and its partner Brigade Capital Management.  

City officials respond

While Macy's has yet to respond to a CBS News Bay Area request for comment, San Francisco Mayor London Breed said the Macy's Union Square store will not be among the first 50 stores to be shuttered and that it "will stay open for the foreseeable future" as it undergoes a transition.

"The City will continue to work closely with Macy's and any potential new owner to ensure this iconic location continues to serve San Francisco for decades to come," said Breed in a prepared statement. "The City is committed to fostering the building's best possible future, including through the use of potential tools such as zoning, air right contributions and transfer tax revenue. I'm also continuing to talk to leaders in retail, business, and real estate about how we can continue to focus on the long-term success of this site and others. There is tremendous opportunity at this site, and I know this City will continue to draw new investments and ideas. I appreciate Macy's partnership and their commitment to working with us.

"That being said, as someone who grew up in San Francisco, Macy's has always meant a lot to the people of this city," Breed added. "It's where families came to shop for the holidays. It's where many people from my community got their first jobs, or even held jobs for decades. It's hard to think of Macy's not being part of our city anymore."

The Macy's location is the heart of Union Square and – for some – it represents the very heart of San Francisco.

Locals shaken by news

The 400,000-square-foot department store has shaped countless memories for Bay Area natives and tourists alike. That includes 21-year-old barista Sofia Arana.

"I was like, 'Oh my God!' That's a staple," she said. "It's been here for so long, this building. Especially for Union Square. Macy's is what you think of. You think about the Cheesecake Factory on top."

Born and raised in San Francisco, Arana said she has fond holiday memories with her family at Macy's. The store has been the backdrop to countless parades and celebrations for nearly 100 years.

"Christmas time, I remember it was always filled up," she remembered. "It felt like New York almost, with hella people. But yeah, it's crazy."

The Union Square Alliance, a collective of business owners in the neighborhood's 27-block radius, issued a statement Tuesday about the planned closure.

"Macy's at Union Square is not closing their store until a buyer can be found for their building. Macy's will remain open and could still be open for years to come. In all likelihood, there will be a holiday shopping season and Macy's great tree in 2024," said Marisa Rodriguez, CEO of the Union Square Alliance.

"Having said that, the situation is fluid and there is no getting around the fact that this announcement hurts. For generations, Macy's has been synonymous with Union Square. I believe that we should work toward a solution that allows Macy's to keep this iconic store open. However, if that does not come to pass, our expectation is that a new owner for this iconic site will come forward to continue a fresh and vibrant vision at this critical location," Rodriguez said.

Peskin's plan to revitalize

Supervisor Aaron Peskin also issued a statement that read in part:

"I was devastated by this morning's phone call from Macy's corporate leadership confirming their national plan to downsize by 150 locations, including the Union Square location, and invest in a small-format model," said Peskin. "Macy's was one of the last holdouts against the national trend of retail closures and consolidations, but as with every seeming blow to our downtown recovery, I see a potential opportunity." 

The supervisor went on to outline possible options for the property, including as a mixed-use development site that could provide both retail and residential units. He also emphasized the importance of "marketing development incentives and opportunities enabled by the City's Downtown Adaptive Reuse legislation" and pushing to build a "state-of-the-art sound stage in Union Square" to attract big-name performers.

Peskin also noted that Macy's "confirmed that the building will remain open until the end of the year, and it will be put up for sale."  

Family memories

Arana said it will be hard to not have that familiar accessibility to the iconic store she has known and loved since she was young.

"I remember when I was little, me and my mom would come shopping. Like, it was a thing on the weekends, and then go to cheesecake and just walk around," she said. "But you can't do that anymore. Not much to look at, unless you have money. There's all these designer stores, but a lot of people don't have money."

Arana feels like a lot of her peers have turned to online shopping anyway. And she worries about problems with unhoused individuals nearby worsening with such a gap in the city center.

Still, as an SF native, she continues to hold on to hope for her city. 

"I just feel like it could go back to how it used to be," Arana said. "And I feel like, people came here and the malls were a big thing, because you had somewhere to go."

And until a new buyer claims the opportunity, Arana will be enjoying Union Square as it evolves from season to season.

Union Square troubles

The closure marks the second major closure of a Bay Area Macy's story to surface this year. In January, the company announced the closure of five locations including the store at Bayfair Center in San Leandro.

San Francisco has been dealing with an increasing number of retail store closures downtown. Last May, Seattle-based retail giant Nordstrom announced plans to close its sprawling downtown San Francisco mall venue and a nearby outlet store, citing deteriorating conditions in the neighborhood. Old Navy also shuttered its large store on Market Street last May. 

The following month, Westfield surrendered control of its namesake shopping center in the heart of downtown San Francisco.  The Westfield San Francisco Centre at Market and Fifth Streets was the city's largest shopping mall. Cinemark announced it would be closing the theater at the mall days later.

Aldo, J. Crew, Adidas, Lucky Brand and Madewell are among the other retailers who have closed stores in San Francisco.

Safety concerns

Safety around Union Square has been a key issue for Breed. Before the start of last year's holiday shopping season, city officials pledged to make Union Square the safest place in urban America.

Breed brought in community ambassadors to patrol the area along with the SFPD deploying additional officers to the shopping district.

The mayor also launched a plan to revitalize the Powell Street corridor to Union Square.

Many of the safety measures were spurred by a high-profile smash-and-grab burglary in 2021 that targeted the Louis Vuitton store in the neighborhood. Nine people were charged in the theft and other nearby retail stores were also vandalized that night.

In an effort to bring tourists back to the area, the mayor brought in celebrity chef Tyler Florence, who opened two restaurants at the end of last year.  

Loureen Ayyoub and Bay City News contributed to this report.

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