CITADEL MACY'S WILL MALL CLOSE STORE

0 Comments | Gazette, The (Colorado Springs), Jan 9, 2009 | by WAYNE HEILMAN

Macy's Inc. will close its Citadel mall store as part of a plan to shutter 11 "underperforming" stores in nine states, a blow to Colorado Springs' oldest shopping mall amid a worsening nationwide recession.

The closing will put the store's 105 employees out of work after a final clearance sale that begins in the next week and will leave the Springs with a single Macy's store, in the Chapel Hills Mall. Macy's said employees at the stores that are closing may be considered for openings at other Macy's stores; the company lists openings at Chapel Hills for sales associates, beauty adviser, cosmetics counter manager and loss prevention agent.

"This closing is not un- expected given that retail industry analysts have predicted record store closings nationwide this year," said Bob Cope, a former commercial real estate agent who now heads the retail enhancement program for Colorado Springs. "I believe Colorado Springs will be affected, but will fare better than the nation. It is simply the free market adjusting the supply of retailers to the current demand."

Midwest Mall Properties LLC, which bought The Citadel two years ago for $153.2 million, said in a statement that it was "disappointed to hear that Macy's will be closing at our location and know that customers feel similarly."

The mall's other anchors are Dillard's, JCPenney and Burlington Coat Factory, along with more than 130 specialty shops and restaurants.

"We are committed to bringing new and exciting shopping experiences to The Citadel. The departure of Macy's will move us forward in this quest," Midwest said in its statement.

Even before one of the weakest holiday seasons in years, the nationwide recession already had claimed a Circuit City electronics store near Chapel Hills Mall, a Linens 'N Things home accessories store on Powers Boulevard, Gordon's Jewelers in Chapel Hills Mall, Steve & Barry's and Old Navy sportswear stores in The Citadel as well as other smaller retailers scattered around the Colorado Springs area.

"There are so many retail failures going on right now, I expect we will see some shopping centers and other retail properties go into foreclosure as well," said Fred Crowley, senior economist for the Southern Colorado Economic Forum.

Crowley estimated the city could lose up to $500,000 in sales tax revenue as a result of Macy's closure and its impact on other businesses that depend on the store or its employees.

Cope, the city retail enhancement program manager, expects that customers who now shop at The Citadel Macy's store will simply travel nine miles north to shop at the company's remaining local store or shop at competitors like Dillard's or JCPenney.

The Macy's store in The Citadel opened in 1984 as a May D&F store and was the centerpiece of a major expansion of the mall. The store later was renamed Foley's and became Macy's in 2006.

"Whenever you have a major department store close, it is definitely an economic setback for both the mall and the city," said Bob Taylor, a local real estate agent who retired three years ago as The Citadel's longtime general manager. "It opens the door to other opportunities such as another department store or renovating the space for a series of smaller stores, but in today's retail market that will be a very difficult thing to do."

Shopping malls have been in decline for several years because many retailers don't want to pay the higher rents needed to support the cost of building and maintaining indoor malls, Taylor said.

Kevin Kratt of Kratt Commercial Properties Inc., who's the leasing agent for the nearby Citadel Crossing Shopping Center, said the closing of The Citadel Macy's store won't affect redevelopment plans for that center, which include construction of a Lowe's home improvement warehouse. But, he said, "it won't help either. The Citadel is still vital and plays an important role in the retail market. It is still a very strong mall."

Cincinnati-based Macy's has no plans "in the foreseeable future" to open another Colorado Springs store, said Jim Sluzewski, a company spokesman.

The closing shocked some nearby retailers in The Citadel, who count on the anchor to generate shopper traffic in the mall's west wing.

"Sometimes, Macy's brought new customers who said, 'oh, I didn't know this store was here'," said Polly Brunelle, manager of the Rainbow junior apparel store a few doors away.

Joy Sunderland, longtime manager of the Merle Norman women's accessories store that's been part of The Citadel since its early 1970s opening, said her customers are established and dedicated, and she hopes the departure won't have an effect.

But, Sunderland added, it's up to The Citadel's management to assist remaining retailers.

"It (the closing) puts a big dent in the mall," Sunderland said.

Shoppers Rosalin Vanwegen and her mom, Fatima Kaluska, said they will miss Macy's at The Citadel. Kaluska said she liked Macy's large perfume selection because she has allergies; Vanwegen said she appreciated the variety of higher-end merchandise, and the Macy's store at Chapel Hills Mall isn't as big.