Downtown San Francisco Losing Its Largest Retail Anchor

Just when you thought the news couldn’t get worse for the retail environment in downtown San Francisco, Macy’s has delivered a major blow with plans to close its 700K SF flagship in Union Square.

The massive retail outlet at 170 O’Farrell St. is one of 150 underperforming stores Macy’s will be closing in the U.S. as it reduces its brand footprint by nearly a third and focuses on luxury brands Bloomingdales and Bluemercury.

The Union Square store, which employs about 500 people, will remain open until a buyer is found for the property. A Macy’s representative told San Francisco Supervisor Aaron Peskin that the soonest the store will close is 2025, according to a report in the San Francisco Business Times.

Macy’s Union Square flagship is one of the retailer’s largest and oldest locations, anchoring the downtown San Francisco shopping district since it opened in 1929, when Macy’s was operating under the name O’Connor, Moffat & Co.

San Francisco downtown has seen an exodus of major retail outlets in the past year as the area has been hollowed out with empty offices and the Union Square district has dealt with major safety concerns.

The list of major store closings in the past year includes Nordstrom, which anchored the Westfield San Francisco Center, the half-empty Union Square mall that now is in receivership; Coco Republic; CB2 and Jeffrey’s Toys. Macy’s retail complex in Union Square includes more than 400K SF that the retailer owns as well as the adjacent historic I. Magnin Building. Sand Hill Properties acquired the 250K I. Magnin building, which Macy’s still occupies, in 2019.

The retailer previously offloaded a 260K SF location at 120 Stockton Street that was site of a Macy’s Men’s Store. The property was sold to Blatteis & Schur and Morgan Stanley Real Estate in 2016.

Macy’s currently operates 19 stores around the Bay Area, according to its website. “The City will continue to work closely with Macy’s and any potential new owner to ensure this iconic location continues to serve San Francisco for decades to come,” said Mayor London Breed, in a statement.

“The City is committed to fostering the building’s best possible future, including through the use of potential tools such as zoning, air right contributions and transfer tax revenue,” Breed said. “I’m also continuing to talk to leaders in retail, business, and real estate about how we can continue to focus on the long-term success of this site and others. There is tremendous opportunity at this site.”

“That being said, as someone who grew up in San Francisco, Macy’s has always meant a lot to the people of this city,” Breed added. “It’s where families came to shop for the holidays. It’s where many people from my community got their first jobs, or even held jobs for decades. It’s hard to think of Macy’s not being part of our city anymore.”