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Stamford Macy’s likely to stay open amid wider closings

September 22, 2016 GMT

STAMFORD — As some 100 Macy’s stores around the country face closings, the firm that operates and co-owns the Stamford Town Center expects that the department-store chain will maintain its establishment in the city’s mall.

“What they said to me is that they have no plans to close any stores within our portfolio of centers,” Bill Taubman, chief operating officer of Taubman Centers Inc., said in an interview Thursday with Hearst Connecticut Media.

Macy’s did not immediately respond to a request for comment, but the announcement from Taubman points to the stability of the Stamford Town Center. The mall has lost only one anchor tenant in the past 10 years, and it has rebounded quickly from its most recent departures.

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Managing uncertainty

In response to ongoing financial struggles, Macy’s announced last month that it would close approximately 100 full-line stores out of a portfolio of 728 locations. The value of Macy’s stock has dropped almost 40 percent in the past year.

Macy’s executives positioned the closings as a move to help the company focus on its highest-performing stores and invest more quickly and more extensively in digital and mobile platforms.

By its own estimate, the department store chain would give up about $1 billion in annual sales by closing the stores. But company officials said that they would offset that loss through savings.

“Nearly all of the stores to be closed are cash flow positive today, but their volume and profitability in most cases have been declining steadily in recent years,” Macy’s President Jeff Gennette said in a statement. “We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand.”

Macy’s has not yet announced which stores it would shutter, but it has said that most of the closings would occur in early 2017.

Covering about 245,000 square feet, Macy’s comprises the Stamford mall’s largest anchor tenant. In total, the mall’s gross leasable area covers about 763,000 square feet.

Despite the upheaval confronting the company, Taubman said that he expects Macy’s to keep running its Stamford store during the next five to 10 years.

“It’s a critical piece of Stamford Town Center, and it’s the only Macy’s store in the heart of Fairfield County,” Taubman said. “It’s a fabulous store and a wonderful anchor. It has a clear market position. The customer knows and respects them.”

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In addition to Stamford, Macy’s runs southwestern Connecticut stores in the Danbury Fair mall, Westfield Trumbull Mall and Connecticut Post Mall in Milford.

Confidence in other tenants

Stamford Town Center last experienced an anchor-store departure in 2014, when Saks Fifth Avenue closed its doors. The following year, Saks returned with a Saks OFF 5TH store, which now occupies about 78,000 square feet in the same space that held the Saks Fifth Avenue.

“They seem to be doing well here,” Taubman said of Saks OFF 5TH.

Saks Fifth Avenue’s exit marked the first loss of an anchor tenant at Stamford Town Center since the 2006 closure of the department store Filene’s. Taubman Centers redeveloped that part of the mall property into a restaurant row.

The hub’s latest arrival, The Cheesecake Factory, is scheduled to open next month at the corner of Greyrock Place and Tresser Boulevard. It succeeds a P.F. Chang’s restaurant, which closed earlier this year.

“Cheesecake does well everywhere, and I think they’ll do very well in Stamford,” Taubman said.

A number of local business leaders said that Stamford Town Center’s long-term prospects will hinge on other factors in addition to the retention of anchor tenants. Some are concerned about a new mall planned in Norwalk taking away business from the Stamford mall.

“A new mall would clearly have an impact on the Stamford mall,” said Joe McGee, The Business Council of Fairfield County’s vice president of public policy. “There’s going to be a conversation about the role of retail in an urban environment.”

pschott@scni.com; 203-964-2236; twitter: @paulschott

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