Macy Sizing Up Orange County for Southland Debut

R. H. Macy & Co., one of the nation’s prime merchandising operations, has been scouring Orange County and other Southland sites in search of possible locations for its first department stores in Southern California, it was learned Thursday.

Macy expects to complete financial studies of some 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 that “we are looking all over Southern California.” But 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.

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. If directors give a go-ahead, he said, two or three Macy’s 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.

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

Macy’s 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 Macy’s as “a retail heaven with a maximum choice in things” that is “incredibly service conscious” and a destination store where shoppers will spend a whole day.

Tucker said Macy’s is an “Orange County type store,” 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 Irvine Co.

Pope said Irvine Co. is especially eager to have a Macy’s department store to kick off 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 the Irvine, Laguna Beach and Laguna Niguel communities.

Pope also said 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.

Pope observed that any merchandising newcomer to Southern California--even one with as splashy a name as Macy’s--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 by competition from South Coast Plaza. He said he doesn’t believe 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 Macy’s store, South Coast Plaza officials declined to comment on the possibility.

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 also had 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 Macy’s 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.”

Times Staff Writer Martha Groves contributed to this story.