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| The not-so-well-maintained side entrance of Macy's at North DeKalb Mall |
Macy's may soon make way for Costco.
A well placed source indicates that they received confirmation that at least one local Macy's store will close as part of the company's previously announced plan to close up to 40 stores by early next year.
A well placed source indicates that they received confirmation that at least one local Macy's store will close as part of the company's previously announced plan to close up to 40 stores by early next year.
All indications lead me to believe that the Macy's at North DeKalb Mall is likely to be (one of) the store(s) to close.
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| Classic two-story Rich's building with mid-1980s single story expansion |
Other possible closure candidates are stores in nearby Northlake Mall in Tucker, Gwinnett Place Mall in Duluth or Greenbriar Mall in southwest Atlanta.
It's no secret that Issaquah, Washington-based Costco has been looking to build a location in North DeKalb county, and the Macy's, (formerly Rich's) at North DeKalb Mall makes perfect sense for their store.
The 2008 plan to bring Costco to the mall would have placed the retailer in a different portion of the mall, in what would have been a newly built, roughly 142,000 square foot space. The space would have essentially been between the current Burlington Coat Factory and the 16 screen AMC Theatres.
As is the case with a number of older malls, Macy's owns their "box" and could see this as a great way to trim an underperforming store and maximize its value by selling the property. Additionally, the Goodyear/Macy's Auto Center outparcel could be an ideal location for a Costco gas station.
Macy's reportedly has a deal in place with mall owner Sterling to sell their property, which in turn would lease it to Costco. According to a source close to the situation, Sterling has the Macy's property under contract and could close on the site before the end of the year.
The new proposal would seem to allow for more parking close to the Costco building, as well as allowing for the wholesale club to anchor the new "open-air" revamp.
(I'd expect to hear more details in the coming weeks given the ICSC Southeast Conference & Deal Making wrapped up yesterday at the Cobb Galleria.)
Costco previously opened at a mid-tier mall, Cumberland Mall, in place of J.C. Penney, in late 2006. By all accounts the mall is doing much better than it had been, and will soon see a new Krogeropen in a portion of the current Sears space.
The most recent intown Costco to open was at TOWN Brookhaven nearly five years ago. At the time of the opening I spoke with James Sinegal, Costco's co-founder and then CEO. Sinegal said at the time that the North DeKalb Mall location had been "tabled" in favor of the Brookhaven opening.
In preparation for this post, I contacted Atlanta native Richard Galanti, CFO of Costco and Jim Sluzewski, senior vice president of corporate communications for Macy's Inc., neither of whom would confirm or deny that a deal was in the works.
Two weeks ago I also spoke with Macy's CEO Terry Lundgren while he was in Atlanta. I asked him about the potential Atlanta closure(s) and when they might occur. Lundgren declined to comment on when and where closures would take place, and would not provide any timetable for possible closure announcements. (I'm pretty sure Lundgren was wearing a Donald Trump suit.)
Although this was my first time personally speaking with Lundgren, well placed retail sources report that this trip was at least the third by the Macy's CEO to metro Atlanta in the past few months.
In a move similar to what I envision occurring at North DeKalb, Macy's announced last month that it will close its store at Owings Mills Mall in metropolitan Baltimore. Macy's agreed to sell the store building to mall owner Kimco Realty, who plans to redevelop the nearly 30-year-old property. Like North DeKalb, the mall was once a beacon in the area and was even home to Saks Fifth Avenue and Lord & Taylor. Today, Owings Mills Mall is home to a 17 screen AMC Theaters, J.C. Penney, Macy's and a few restaurant outparcels.
North DeKalb Mall, then known as North DeKalb Center, opened in 1965 with Rich's fifth "branch" store, in the space now occupied by Macy's.
A cool history of the North DeKalb Mall can be found here
Last year, North DeKalb Mall was purchased by Lennar Commercial and Sterling Organization. The new ownership then announced plans to to convert the enclosed portion of the mall into an open-air concept. A similar transformation was completed earlier this year when Biltmore Square Mall, a once thriving mall in Asheville, North Carolina that had fallen on hard times, was reopened as an open air outlet mall, "Asheville Outlets."
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| The exterior of the would-be Costco at North DeKalb Mall could look like this |
Although I have not been privy to any plans, I could see AMC Theatres and Marshalls remaining in the center after the transformation, while others would likely depart. Ross Dress For Less, which occupies a former Old Navy, could remain as well, but given they are opening a new store in Suburban Plaza, they may consolidate operations to that store.
It would seem to be an easier task to lease space in the mall / "lifestyle center" once you add national anchors like Costco to the property. With luck, the Costco store will come to fruition, and will lead to a renewed interest in the property.
It would seem to be an easier task to lease space in the mall / "lifestyle center" once you add national anchors like Costco to the property. With luck, the Costco store will come to fruition, and will lead to a renewed interest in the property.
What would you like to see happen at North DeKalb Mall? Would you be in favor of Costco coming to the mall, even it came at the expense of Macy's? If North DeKalb were to get "de-malled," what other retailers would you like to see join the center?
Please share your thoughts below.