Macy's to close Century III Mall store as part of national reorganization
The troubled Century III mall is losing its largest tenant: Macy's announced Wednesday it would be shuttering its West Mifflin store as part of a major revamping of its operations that will affect thousands of jobs nationwide.
Macy's, the nation's largest department store company and one of Century III's first tenants when it opened as Kaufmann's in 1979, will close in the next eight to 12 weeks. The company said the decision is part of a wider batch of 36 Macy's store closings slated for early 2016 as the retailer adjusts to declining sales. It will affect the jobs of 101 employees in West Mifflin.
The mall's owners, Las Vegas-based Moonbeam Capital Investments, had not received official notification from Macy's as of late Wednesday, said Shawl Pryor, Moonbeam's senior vice president of real estate. But rumors of the store's closing started to make their way around West Mifflin earlier in the day, said Borough Manager Brian Kamauf.
Kamauf said he was disappointed to hear that Macy's was leaving and hoped Moonbeam could revive the once-thriving mall.
“I believe they're still trying,” Kamauf said of Moonbeam. “I'm hoping some of the development we've had up the street at Century Square, some of that will trickle down.”
The store closings followed a dismal holiday shopping season in which retailers struggled to adjust to growth in online shopping that has cannibalized brick-and-mortar sales. Macy's said its sales declined 5.2 percent in November and December as unseasonably warm weather hurt purchases of winter apparel.
The Cincinnati-based department store chain is cutting staffing levels and shrinking its store count to match the lower sales volume, part of a plan it said will shave $400 million in annual expenses. The changes will affect three to four workers at each of about 770 Macy's and Bloomingdale's stores — about 2 percent of the company's workforce — for a total of 3,000 associates nationwide. It said half of those employees are expected to be offered other jobs. The restructuring includes an offer of voluntary buyouts to 165 senior executives, the elimination of 600 back-office positions and the closing of a customer service center in St. Louis that will affect 750 workers.
Macy's had been a stellar performer since the recession as it localized merchandise, cut costs and developed exclusive brands that set itself apart from others. But increasingly, Amazon.com and other online rivals are becoming a threat. It has acknowledged that customers are spending more of their money on experiences such as eating out and visiting spas, instead of clothing. And when they do buy fashions, they are more likely to buy name brands at bigger discounts at stores such as T.J. Maxx.
In response, Macy's has been working hard to expand its online services while pursuing new growth opportunities. It purchased upscale beauty brand Bluemercury last year and made its first foray into discount stores under Macy's Backstage to go head to head with T.J. Maxx.
“In some cases, there will be short-term pain as we tighten our belt and realign our resources,” Terry J. Lundgren, chairman and chief executive at Macy's Inc., wrote in a statement. “But our eye is on a long-term vision of Macy's Inc. as a dynamic retailer that serves existing customers and acquires new ones through innovative approaches.”
Lundgren said the company is buoyed by a strong performance in its online business. For the November and December period, Macys.com and bloomingdales.com filled nearly 17 million online orders, up 25 percent from the same period a year ago.
The departure from Century III could be a major setback for Moonbeam's efforts to fill vacant storefronts. Pryor said Macy's is the mall's largest tenant. As one of three anchor stores, it helped attract shoppers for the mall's smaller tenants.
Bookstore chain Bradley's Books has a location several storefronts away from Macy's in Century III and was planning to relocate to be closer, said Brian Berry, the store manager. He worried that the departure of Macy's will reinforce negative perceptions about Century III.
“I think it's very sad,” Berry said. “I think it's going to signal an end to an era, and I'm not sure that they will fill that space.”
Macy's is the second anchor tenant to leave Century III in just over a year. Sears closed there in December 2014, leaving Macy's, Dick's Sporting Goods and J.C. Penney as the remaining anchor retailers.
A J.C. Penney spokesperson wrote in an email that there are “no plans to close our location at Century III Mall in West Mifflin.” A Dick's spokesman declined to comment.
In May, a preliminary plan posted — and later removed — from Moonbeam's website called for opening the center part of the 1.3 million-square-foot complex so that it would resemble more of an outdoor shopping plaza. It also called for a movie theater and 14,800-square-foot hotel, as well as transforming the vacant Sears store into medical offices or an assisted-living facility.
However, no official plans have been submitted to the borough, and its status is unknown, Kamauf said.
Key aspects are likely to change with the surrounding retail landscape. Golden Star Theaters announced in the fall that it would open an upscale movie theater this year at Century Square Shopping Center, which is 1 mile away from Century III.
On Wednesday, Pryor said the Century Square theater could affect Moonbeam's plans to open a theater at Century III, but the mall operator is still in negotiations with a national movie chain.
Century III has been in decline for years. Entire wings of the complex are made up of dark storefronts. Borough officials estimate that West Mifflin has lost $1 million annually in tax revenue as the mall's value plummeted.
The West Mifflin store will be the second Pittsburgh-area Macy's store to close in recent months. Macy's closed its Downtown location in September.
Chris Fleisher and Tory N. Parrish are staff writers for the Tribune-Review. Reach Fleisher at 412-320-7854 or cfleisher@tribweb.com. Reach Parrish at 412-380-5662 or tparrish@tribweb.com. The Associated Press contributed.
