Image: Macy’s in downtown Cincinnati
Federated Department Stores, the nations largest operator of department stores, as recently as December of 2006 was threatening to pull its massive Macy’s out of Downtown Miami. The DDA and City officials intervened and the move has been halted for now. As Transit Miami had pointed out in late last December, the threat to pull out made no sense, because after a long period of neglect, Downtown is finally seeing a major surge in construction activity and infrastructure improvements. Now, in a move to further solidify its position in the Miami retail market, FDS is investing in its Lincoln Road Macy’s. It seems FDS made all the noise about leaving Downtown to get concessions from the City of Miami–at a time when the City is seeing a boost in tax revenue. The concessions seem to have been provided to FDS, quietly, since no more fuss has been made about the issue.
So, in consideration of the current news out of South Beach, I see it fit to make a prediction: FDS will revamp its Downtown Miami Macy’s store (the largest it has in S. FLA) within the next three years and will make it their flagship Miami store–similar to Macy’s on 34th street in Manhattan, Union Square in San Francisco, and Marshall Fields on State Street in Chicago. This revamp will follow the completion of the nearby Wind, Mint, Ivy, Epic (Dupont towers), Metropolitan Miami towers, and Icon Brickell towers–among others. The over sized and old department store is due a revamp as it is, and FDS cannot expect for the urban store to enjoy profitability in its current overall physical state. It is ideally positioned to capitalize off of Downtown’s rapid development and FDS is sure to plan for it–as they did in Cincinnati. To further speculate, it could be that FDS put pressure on the City for concessions back in December of 06′ to lay the groundwork for a large investment in the Downtown location down the road. The CBD’s existing and incoming residents will benefit most if BoB’s prediction is right.