Updated: Macy's to close store at Paseo Colorado on Colorado Boulevard in Pasadena

Macy’s Inc. said Thursday it is closing its Pasadena store on Colorado Boulevard.

The closure is part of a larger plan to shutter five Macy’s locations and one Bloomingdale’s store nationwide this spring. The retailer said they were selected because they were not profitable enough or because the leases on the properties were ending.

The 158,000 square foot Macy’s store at the Paseo Colorado shopping center was one of two locations in Pasadena, with the other located on Lake Avenue. That close proximity led to the Paseo Colorado store’s closure.

“There is a very large Macy’s only about a mile away,” said Macy’s spokesman Jim Sluzewski. “There really wasn’t a need for the customer in that area to have a second location.”

Sluzewski said Macy’s was exiting its lease early at Paseo Colorado, but declined to say how long its lease was. The store opened in 1980 as a Broadway department store, which later turned into Macy’s.

The Macy’s was the last remaining retail anchor from the old Paseo Colorado mall. The mall was transformed into a new shopping center more than 10 years ago under new ownership. In recent years, the shopping center has lost some significant tenants including Sephora and Cole Haan.

“Macy’s being a major traffic generator, the impact will certainly be felt,” said Derrick Moore, a principal of urban retail properties at commercial real estate services firm Avison Young.

He said if Paseo Colorado is able to backfill the space with another anchor that will generate just as much traffic, it’s possible that “any sort of ill effects will be minimized and maybe even quickly eliminated.”

Moore said he could see retail stores like Forever 21 or an Urban Outfitters interested in the Macy’s space.

The shopping center’s owner, DDR said Paseo Colorado is 566,000 square feet. DDR’s website lists 103,799 square feet—or 18 percent of that space as available for leasing.

DDR did not respond to KPPC’s list of questions. A DDR spokesman pointed to a statement that said, “… gaining control of this highly desirable space (Macy’s) will allow DDR to commence a significant redevelopment of Paseo Colorado.”
 
DDR said Paseo Colorado’s trade area has nearly 1 million people and the average household income was $96,200.

Clearance sales at the Macy’s Paseo Colorado store will begin on Monday. The store employs 116 people. Macy’s said it is possible employees may be offered jobs at other Macy’s locations and those that are laid off will be given severance packages.

The retailer said the closures of the six Macy’s and Bloomingdale’s stores nationwide will allow it to open stores in other areas of the country. Macy's said it has plans to open nine more Bloomingdale’s and Macy’s stores, including a new Bloomingdale’s location in Glendale and a new Macy’s in Victorville.

“This leads us to open new stores where we see the opportunity to fill gaps in important markets,” said Karen Hoguet, chief financial officer at Macy’s Inc., in a statement.

The company said it estimates there will be costs of $2 million to $4 million associated with the closings in its fourth quarter results.

Macy’s on Thursday also released its December sales results, for the five weeks ending Dec. 29. Sales at the retailer were $5.1 billion, up 3.6 percent from a year ago. Sales at stores opened at least a year, were up 4.1 percent, compared to a year earlier, Macy’s said.

After the store closures and openings, Macy’s said it will have nearly 800 stores. Bloomingdale’s will have 37 stores and 13 outlet stores.

Macy's stock closed at $37.47 a share, down 84 cents on the Nasdaq on Thursday.