Macy Looking at County Sites, May Open First Southland Store

R.H. Macy & Co. Inc., one of the nation’s prime merchandising operations, is scouring Orange County in search of possible locations for its first department store in Southern California--including South Coast Plaza and the planned Irvine Center regional mall at the juncture of the Santa Ana and San Diego freeways.

Macy expects to complete financial studies of selected sites and decide whether and where to enter the fiercely competitive Southern California market within six months, according to a source within the Manhattan-based retailing firm who asked not to be named.

Macy spokeswoman Judy Cohn confirmed Thursday, “We are looking all over Southern California.” She cautioned that such studies in the past have not yielded any new stores. “We’ve looked before in previous years and decided not to go into the market,” she said.

Opportunity Seen

However, the source who is playing a key role in Macy’s current real estate study said, “I personally think there is opportunity for us” in Southern California.

The final determination, he said, will be made by the company’s board of directors. If the directors give a go-ahead, he said, two or three Macy stores will be established in Southern California within two years.

While remaining steadfastly noncommittal about which store sites are most favored, the source said he considers Orange County “unique” because “it is rapidly growing and has people with good incomes.” One of his biggest concerns, he said, is finding a store location that shoppers can reach without being caught in freeway traffic snarls.

Other Potential Sites

He added that Macy is also studying potential store locations in Los Angeles, San Diego and Riverside counties.

Macys would be a plum for any retail developer in Orange County, said Thomas D. Tucker, director of real estate advisory services at the accounting firm of Laventhol & Horwath in Costa Mesa. Tucker described Macys as “a retail heaven with a maximum choice in things” that is “incredibly service conscious.” He said it is a destination store where shoppers will spend a whole day.

Tucker said Macys is an “Orange County-type store” that is much like Nordstrom, only “a little more cosmopolitan, a little sexier” in its line of merchandise.

Main Place/Santa Ana, the City in Orange and South Coast Village in Costa Mesa are other Orange County shopping centers that Macy representatives have toured in recent months, the Macy source said.

“I think everybody has thrown their hat into the ring,” said Bill Pope, vice president of retail development at the Irvine Co.

Pope said the Irvine Co. is especially eager to have a Macys department store to launch the scheduled fall, 1991, opening of the 1.1-million-square-foot first phase of Irvine Center, a long-awaited regional mall in south Orange County that is designed to serve Irvine and other south county communities.

Special Allure Sought

Pope said the Irvine Co. is looking for a merchandiser that is not yet in Southern California to give the new mall a special allure for shoppers and speed its growth. Besides, he said, “there is no incentive” for department stores with outlets already in Orange County to open additional county locations and compete with one another.

Bob Peterson, a vice president of Coldwell Banker with expertise in retail business, said landing Macys at the Irvine Center would be “a great start for the Irvine Co., and it might attract a few other stores (to the center) that are on the fence.”

Peterson said that although “a major shopping center is not made by a single tenant,” Macys could give Irvine Center “a new dimension” in the way that Nordstrom did when it opened its first Southern California store at South Coast Plaza in 1978.

Pope said that, in addition to Macy, the Irvine Co. has had discussions with other eastern stores, including trendy Bloomingdale’s. But he said officials of Federated Department Stores, which owns Bloomingdale’s, said they are not interested in having Bloomingdale’s compete with Bullock’s stores that Federated already operates on the West Coast.

Start-Up Costs Cited

Pope observed that any merchandising newcomer to Southern California--even one with as splashy a name as Macys--would have to commit a huge amount of start-up money to establish a beachhead in what he called “the most competitive department store market in the country.”

Macy would have a tactical advantage over other newcomers, Pope said, because it already has 25 stores in Northern California and could use the same administrative and warehousing facilities to service new stores in Southern California.

Tucker of Laventhol & Horwath said that while he believes Macy would do well in Orange County, he believes “it would be a mistake” for Macy to move into the planned Irvine Center mall--which he said has been left behind in the dust of competition from South Coast Plaza. He said he does not believe that there is room for another major mall in the county.

Although a Macy source said South Coast Plaza is one of the malls under consideration as a site for a Macys store, South Coast Plaza officials declined to comment on the possibility.

Santa Ana Location

John B. Gabriel, vice president and regional director of leasing for JMB Federated Realty, the joint venture partner redeveloping Main Place/Santa Ana, said Macy representatives had also discussed the possibility of locating there.

“Macy has been interested in trying to get into Southern California for some time--and not with a great deal of success,” Gabriel said. “They couldn’t do it because they can’t come into the market with (just) one store. And they couldn’t put enough deals together. . . . “

A major concern, he said, is that many of the anchor department stores in Southern California malls have the prerogative to approve mall expansion and they don’t want a Macys next door.

“Nordstrom wasn’t perceived to be a threat,” Gabriel said. But since Nordstrom’s huge success, he added, “it puts even more pressure on department stores to keep another player out.”

Officials of local department stores, however, denied that they fear Macys competition. James Brooks, general manager at Bullock’s in Main Place/Santa Ana, said, “I’d much rather have them next door than three miles down the road from me. They draw traffic, so I don’t know how it can hurt. Look what’s happened to South Coast Plaza.”