ROBINSON’S & MAY CO. COMBINE : 12 Southland Store Closures Cast Pall Over Area’s Malls : Retailing: Operators have seen their revenues slump as they struggle with recession.
The closing of 12 May Co. and Robinson’s department stores in Southern California deals a new blow to some shopping mall operators who have seen their revenues slide as retailers struggle with the region’s deep recession.
“I don’t know what our future will hold,” said Nancy Feightner, manager of Westminster Mall in Westminster, which will lose a Robinson’s and is still feeling the impact of losing a Buffum’s last year.
Other malls not facing closings confront another problem--customer confusion. In addition to closing stores, May Department Stores is merging its May and Robinson’s store divisions into one entity. Thus six Southern California malls will be left with two Robinsons-May stores.
One of these is South Coast Plaza in Costa Mesa, the most prosperous mall in the continental United States. But on Friday, officials there said they were delighted by the move. “We have every confidence that May Co. will be able to make it successful,” said Jan Roberts, the marketing director.
Department stores such as May Co. and Robinson’s are the lifeblood of malls. Such “anchor stores” typically occupy huge spaces at discount rates because their heavy advertising budgets draw shoppers that support the entire shopping center. When a department store closes, all of the specialty shops nearby can suffer.
Irving Wolf, a mall consultant in Santa Monica, said that malls generally have been quick to find new retailers to take the place of the ones that leave. “We’ve been able to replace almost all of the anchor stores,” he said.
But often, he said, the replacements are mass merchandisers with lower prices than the stores that pulled out.
Still in the long term, experts say, the closures could prove beneficial for malls that find creative solutions to filling the unleased space. Some may find popular, contemporary stores that boost overall business at their centers. Or they may choose to subdivide the space into boutiques.
“We have no choice,” said Jody Martin, vice president of Stillerman Jones & Co. in Indianapolis, a shopping trends research firm. “We have to look at it positively. We have to find creative uses for these spaces.”
A study released in August by the International Council of Shopping Centers, a trade association based in New York, found that 60% of the anchor-store space that becomes available at shopping centers is usually filled within a month, and that 85% of the space is eventually claimed.
But in recession-ravaged Southern California, already reeling from previous retail closures, mall executives were worried about how they will cope with the loss of either a May Co. or Robinson’s. Others saw an opportunity to make important changes in their mix of merchants.
“We really believe it could be better for everybody,” said Jack Ohringer, vice president of City Freeholds (USA) Inc., which owns the Buena Park Mall, where a May Co. will close. The store, he said, was built in 1961 and was badly in need of remodeling. Now, he said, the shopping center will be able to decide whether to change direction.
As for those malls that will have two Robinsons-May Co. stores, there is some precedent that such an arrangement can work with some degree of success.
For example, Burdine’s department stores operate at opposite ends of the Edison Mall in Ft. Myers, Fla., with a measure of success, although customers are sometimes confused, said Troy Strait, mall manager.
Sometimes a customer will park a car and walk into one Burdine’s, wander around the mall and unknowingly exit through the other Burdine’s. Such a shopper, Strait said, not only can’t find the car, he or she can’t find the parking lot. He noted, though, that both stores are successful.
Some Highlights of the Retailers’ Reorganization
Timetable: Store closings and consolidations of May Co. and Robinson’s effective Jan. 31, 1993.
Layoffs: 550 employees at Robinson’s central offices will lose their jobs, while 150 others will be retained. Employees at stores to be closed will be offered jobs at other locations.
May Co. California stores closing: Wilshire Boulevard, West Covina, Buena Park, Santa Ana and San Bernardino.
Robinson’s stores closing: Downtown Los Angeles, Pasadena, Glendale, Woodland Hills, Sherman Oaks, Westminster and Brea.
Expansion Plans: Robinsons-May will invest $260 million from 1992 through 1995 to remodel certain stores and to open 12 new stores, including two that have already opened this year at Valencia Town Center in Santa Clarita and at Moreno Valley Mall in Moreno Valley. Other new stores will be located at:
*Farmer’s Market, Los Angeles (replacing Wilshire store)
*Glendale Galleria, Glendale (under construction)
*The Plaza, West Covina (replacing Eastland Center store)
*Murietta Springs Mall, Riverside County
*Sunset Galleria, Henderson, Nev.
*Arrowhead Towne Center, Glendale, Ariz.
*Four other locations to be announced
Consumer Impact: After Dec. 1, holders of Robinson’s and May Co. credit cards may use their cards at either store. Beginning February, 1993, new Robinsons-May credit cards will be issued.
