South L.A.’s Broadway to Stay Open as Macy’s

Sparing south Los Angeles the pullout of another major business, Federated Department Stores said Wednesday that it will not close or sell its Broadway department store at the Baldwin Hills Crenshaw Plaza and instead will keep it open under the Macy’s name.

The disclosure, hailed by community activists, came as part of a good news/bad news package of announcements from Federated that included word of layoffs for 1,680 employees in California.

Federated also named four sites for its first Bloomingdale’s stores in the state: Newport Beach’s Fashion Island, Century City Shopping Center, a mall near Stanford University and, as previously disclosed, the Sherman Oaks Fashion Square. They were chosen from among the 82 locations that Federated bought in October from Broadway Stores Inc.

Trying to put the best face on the layoff news, Carol Sanger, a spokeswoman at Federated’s headquarters in Cincinnati, said her company will retain 10,800 former Broadway employees who probably would have lost their jobs if Federated had not bought the failing chain.

In addition, she said, about 1,000 new employees will be hired by November 1996, when Federated plans to open its first California Bloomingdale’s.

Federated’s moves resolved some of the remaining questions about how it would mesh the former Broadway Stores divisions--including Broadway, Emporium and Weinstocks stores--into its huge $15-billion-a-year retailing empire. Federated has wrestled with deciding which stores to convert to Macy’s or Bloomingdale’s, or sell or close.

While the upscale, prestigious Bloomingdale’s chain figures to add a new dimension to retailing in California, perhaps the most upbeat news in Federated’s plans for Southern California was the decision to keep the Crenshaw store open.

The fortunes of Baldwin Hills Crenshaw Plaza--which has gone through ups and downs financially since opening in 1988 as a pioneering inner-city shopping mall--have been closely watched by city officials and community activists. After the Broadway chain was sold, fear mounted that Federated would shut the Crenshaw store along with other struggling Broadway operations.

Community activists were concerned that losing the store would worsen the shortage of major shopping outlets in south Los Angeles, posing a hardship for consumers and discouraging other businesses from locating there.

To pressure Federated to keep the store open, community activists launched petition drives and staged a march this month that drew 200 neighborhood residents.

A spokeswoman for Macy’s West in San Francisco, Elizabeth Krogh, acknowledged the role that community pressure played in the decision. “Macy’s listened to the community, and Macy’s is willing to give the Crenshaw community a try,” Krogh said.

Krogh added that the store will operate as a Macy’s “for at least several years” and that its long-term future depends on its financial performance.

But an elated Councilman Mark Ridley-Thomas, who helped lobby Federated to keep the store open, said the move “is not a matter of charity.”

Ridley-Thomas predicted that Macy’s would attract many new shoppers and new businesses, pointing to the recent boom at the Baldwin Hills Crenshaw Plaza since the opening of the Magic Johnson Theatres last summer.

“What people want is a choice and there has been a lack of choice,” he said. “This means another shopping option.”

The decision to retain the Crenshaw store was rare good economic news for an area that has suffered a business exodus for decades. South Los Angeles’ economy was devastated in the late 1970s and early 1980s as major industrial employers such as General Motors, Goodyear, Firestone and Bethlehem Steel shut aging factories. Bankers and insurers, critics say, dealt the area another crushing blow by redlining the area and investing elsewhere.

The 1992 Los Angeles riots, even though they occurred over much of the city, hurt the area’s image further, leading to more departures. For consumers, the shortage of supermarkets and general merchandise stores has added further miseries, particularly for people unable to drive to areas with better shopping.

It has been a frustration too to middle-class families in south Los Angeles who have craved the convenience of shopping in their own neighborhoods.

As a result, Harry McElroy, president of the Hepburn Homeowners Assn. in Leimert Park--a predominantly African American, middle-class area near the Crenshaw plaza--called Federated’s decision “exciting.”

“We don’t have a quality department store like that [Macy’s],” McElroy said. “We have to go way out to the Westside.”

McElroy, maintaining that many merchants wrongly lump the area with impoverished sections of South-Central, said, “This is a black neighborhood with a lot of buying power.”

The other upbeat news for consumers was Federated’s selection of the four Bloomingdale’s sites in the state. These will be the first locations west of the Rockies for the 18-store chain, which is famed for its glitzy Manhattan flagship operation.

Shopping centers throughout California competed fiercely to have their Broadway, Emporium or Weinstocks sites converted to Bloomingdale’s. Beverly Hills fought hard but lost to Century City for one store. Nowhere, however, was the fight more intense than in Orange County, where the South Coast Plaza in Costa Mesa and Newport Beach’s Fashion Island shopping centers were pitted against each other.

Although Fashion Island previously was designated for a Macy’s, Federated officials said they changed their minds when unspecified complications came up in negotiations to put a Bloomingdale’s in South Coast Plaza.

In a news release, Bloomingdale’s Chairman Michael Gould--a former head of the Robinson’s chain in Southern California--said: “This is a market we know well. . . . This makes us doubly excited about bringing Bloomingdale’s to California, and encouraged to be doing so at a time when the state’s economy is showing real signs of improvement.”

At the same time, the 775 employees at the four Broadway stores being converted to Bloomingdale’s were given layoff notices Wednesday, and no commitment was made to hire any back when the operations reopen.

Likewise, the 170 workers at the Broadway store in Beverly Center were notified that they would be put out of work in mid-March, when the facility is scheduled to close. Federated said it has not “finalized” plans for the site and would not elaborate on whether it is in negotiations with a potential buyer.

The latest announcements cut the number of former Broadway stores sites whose status is in limbo from 21 to nine. Fifty will be converted into Macy’s or Bloomingdale’s, nine will be sold to Sears, Roebuck & Co. and another 14 will be closed or sold to other buyers.

Federated also said it will close its Bullock’s in downtown Los Angeles. However, the company said it will transfer the 121 employees to the nearby, and bigger, Broadway Plaza store, which will be kept open.

In San Francisco, the news was grimmer. All 500 employees at Broadway Stores’ Emporium site in downtown San Francisco were laid off, and 114 warehouse workers were given pink slips.

Federated says it expects to invest more than $525 million refurbishing its newly acquired stores.

Silverstein is a Times staff writer and Becker is a Times correspondent.

* MORE COMPETITION: Bloomingdale’s can’t rest on its laurels in California. D1.