Macy's Turns to the Bronx for New Opening

Wall Street Journal, Nov. 10, 2011

Macy's Inc. will open its first new store in the five boroughs in more than 15 years, as the retailer looks to take advantage of Bronx shoppers seeking more midpriced offerings. The 160,000-square-foot store will help anchor an ambitious new Mall at Bay Plaza, an enclosed shopping center that will feature 630,000 square feet of new shops, including the Macy's.

Developer Sam Shalem, chief executive of Prestige Properties, which is developing the mall, says he hopes that Macy's position as an anchor will attract other popular chains to the complex. Prestige Properties has owned a huge parcel of land just off Interstate 95 since 1985. Since then, it has developed Bay Plaza Shopping Center into a 1.3-million-square-foot complex with big-box stores, including Barnes & Noble, Staples, Big Kmart and, most recently, Daffy's.

The developer now plans to add a new three-story mall on the same lot, which will be the first closed shopping center in the Bronx, according to Mr. Shalem. J.C. Penney & Co. already has a freestanding store on the property that will connect to one end of the new project and also will serve as an anchor. Before moving ahead with the rest of the expansion, Mr. Shalem waited for years to land Macy's as the perfect second anchor.

"All along we were dancing back and forth with Macy's to be the second anchor," Mr. Shalem said. "Macy's is an upgrade" from existing tenants in the mall, he said. The Cincinnati-based department-store chain currently has one other Bronx location in Parkchester, which opened in 1941. The last new store that Macy's opened in the five boroughs was at Queens Center in 1995. "For the last few years, we haven't been opening many new stores because there aren't many shopping centers being built," said Jim Sluzewski, senior vice president of communications for Macy's.

But he added that "the Bronx is such a densely populated borough, it presented an opportunity for a second store." Analysts also said that the Bronx move doesn't appear to represent a major change of course for the retailer. "I would say that it was more a one-off market opportunity," said Matthew Boss, an analyst at J.P. Morgan. He noted that Macy's northeastern stores are among its most productive, and the new Bay Plaza store represents an opportunity to expand in that key market. Indeed, experts said the Bronx continues to lag significantly behind other boroughs in terms of shopping options. "As the Bronx has settled into a borough where you're seeing an increasing middle class and disposable income the need for retail is there," said Benjamin Fox, an executive vice president for retail leasing at Massey Knakal Realty Services, a brokerage.

The Bronx has seen several new retail projects recently, including a new Related Cos. mall near Yankee Stadium and a planned new retail center at the Kingsbridge Armory. Prestige's new $270 million project will break ground in the spring, and is expected to be finished in fall 2013 or spring 2014. It's anticipated it will generate 2,000 construction jobs and 1,700 permanent jobs. In addition to the Bronx store announced Wednesday, Macy's said that it plans to open two other new stores—one in Suffolk County's Bay Shore and another in California.