Bloomie's mulling new store in SoHo

Real Estate Weekly, March 20, 2002 by Parke Chapman

Bloomingdale's is seeking to open a store within an historic SoHo building. In order for Bloomingdale's to open a southern branch, however, their parent company--Federated Department Stores--is asking for a host of city and state tax incentives.

The, 100,000-SF building, 504 Broadway, is much smaller than Bloomingdale's 550,000-SF 59th Street location.

Federated recently signed a letter of intent to lease the building between Spring and Broome Streets which currently houses Canal Jean Company. This building is located on the northern boundary of the "Liberty Zone," an area that officials have deemed was most affected the events of Sept. 11.

Still, 504 Broadway is located in the "Resurgence Zone" between Canal and Houston Streets. According to officials, this area has been hit hard by the decline in international tourism.

If the branch is opened here, it would be the first major department store to establish a retail presence south of 14th Street.

Backing up their demands for a hefty incentives package, it is expected that Federated will argue the merits of a SoHo Bloomngdale's as a way to stimulate retail activity within a large area downtown.

A New York Times article reported that Bloomingdale's strategy with a SoHo store would be to appeal to younger consumers and tourists, which its 59th Street location has historically had difficulty doing.

"This is a designer destination. You have Prada, Donna Karan, Ralph Lauren--they're all here. If Bloomingdale's is looking to reinvigorate their brand, this is probably a good place to do it," said Steve Yaloff, president of retail brokerage Robert K. Futterman Inc.

Federated, one of the nation's largest department store retailers, is rumored to be in merger talks with another major retailer, May Department Stores.

May owns Lord & Taylor, Foley's, Filene's, Strawbridges and Hecht's. In addition to Bloomingdale's, Federated owns Rich's and Lazarus. If the two were to merge, the combined firm would be a retail behemoth.

A Wall Street Journal article reported that the two firms were in "preliminary talks" as of last week. The article summed up the potential merger as "complex" since it would be difficult to satisfy regulators.