Macy’s to close 5 NYC locations, including Downtown Brooklyn flagship
Streetview of 422 Fulton Street, Map data © 2022 Google
Macy’s on Thursday announced the closure of 66 stores across the country, including five locations in New York City. The closures are part of the department store chain’s “Bold New Chapter” strategy, which includes closing roughly 150 underperforming stores by 2026. The announcement follows the sale of Macy’s location at 422 Fulton Street in Downtown Brooklyn last month for just $23 million, as first reported by the New York Post.
Early last year, Macy’s announced plans to close 150 stores, or roughly 30 percent of its real estate portfolio, as part of its strategy to adapt to challenges facing department stores. The strategy involves closing the most underperforming stores while focusing on investing in Macy’s 350 “go-forward” locations through fiscal year 2026.
“Closing any store is never easy, but as part of our Bold New Chapter strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go–forward stores, where customers are already responding positively to better product offerings and elevated service,” Tony Spring, chairman and chief executive officer of Macy’s, Inc., said.
In addition to the Downtown Brooklyn store, the following Macy’s locations in New York City will be closing this year:
- 88-01 Queens Boulevard, Queens
- 98 Richmond Hill Road, Staten Island
- 404 East Fordham Road, Bronx
- 2027 Emmons Avenue, Brooklyn
A full list of store closures can be found here.
The Downtown Brooklyn flagship store was sold to a group of New York real estate investors who publicly announced the deal but declined to discuss the exact price. Macy’s also declined to discuss the deal last week.
However, sources with knowledge of the transaction told the Post investors paid Macy’s only $23 million to purchase the 440,000-square-foot property, with intentions to convert it into “family-friendly attractions” with potential tenants like Netflix, Universal, and Lego.
The transaction equates to just over $50 per square foot, significantly lower than the average $250 per square foot rate for similar retail spaces in Downtown Brooklyn.
Macy’s moved into the space in 1985, taking over from the department store Abraham & Straus. In 2015, Macy’s sold the top four floors of the eight-story building to Tishman Speyer, which added a 10-story office tower atop 422 Fulton Street called the Wheeler. Macy’s, which operates on the lower floors, underwent a $100 million renovation that wrapped up in 2018.
The Wheeler features 620,000 square feet of creative office space and one of the largest floor plates in Brooklyn with 15+ foot ceilings, a rooftop terrace, and 130 subterranean bike stations with lockers and showers.
According to the Post, Albert Laboz, founder of United American Land teamed up with Isaac Chera of Crown Acquisitions and the Jackson Group’s Chehebar family to purchase Macy’s Downtown Brooklyn location.
The newspaper reported Chera purchased the property directly from Macy’s for $23 million and quickly flipped it to Laboz and the Chehebar family for $36 million.
The group of investors then partnered with another entity, whose identity remains unknown, but who now holds $80 million in shared value of the property.
“It’s a very good deal and we are very pleased with the acquisition,” Chehebar told the Post. “The Macy’s building is one of the most historic retail buildings in all of Brooklyn and we intend to reinvigorate it and activate the retail to its highest and best use.”
The deal comes as Macy’s is experiencing a lull in business, with preliminary results released last month showing a 2.4 percent decline in sales, according to the Post.
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