Nordstrom speculation J.C. Penney Co.'s decision to close its 180,000-square-foot flagship Hawaii store in the Ala Moana Center is giving new life to speculation that Nordstrom Inc. might have its long-awaited chance to open a full-line department store in Honolulu.
picks up on news of
J.C. Penney’s pullout
By Russ Lynch
rlynch@starbulletin.comBut neither Seattle-based Nordstrom nor General Growth Properties Inc., which owns Ala Moana, have much to say about that.
Penney said it will close its stores Jan. 10 at Ala Moana, Pearlridge Center and the Prince Kuhio Plaza in Hilo, leaving only its Maui store in the Queen Kaahumanu Center. The company will cut some 460 jobs.
"It certainly creates an opportunity for us," said General Growth's Hawaii general manager, Dwight Yoshimura. "Our company is just weighing the options as to what it should do with the space. Our goal is to make sure that the retail mix for that space services our local customers as well as our tourist business."
A Nordstrom spokeswoman, Deniz Anders, said her company had heard that J.C. Penney will pull out of Ala Moana. But she could not say whether the upcoming Ala Moana vacancy creates an opportunity for Nordstrom.
"We are still looking forward to having a full-line department store in Honolulu," Anders said.
General Growth continues to talk to Nordstrom, Yoshimura said.
"We've been very thankful that Penney has been part of our center. I've been very thankful, too. I buy my clothes there," Yoshimura said.
It is a double loss for General Growth because it also owns the Prince Kuhio Plaza in Hilo, where Penney will close its 72,000-square-foot store.
At Pearlridge, where Penney will close a 129,000-square-foot store, management also sees the vacancy as an opportunity.
"Our view on this, as a shopping center operator, is that we're always looking at ways to change things around and move things up," said Martin Lastner, Pearlridge general manager. "It's a great opportunity for us to provide something new," he said.
At the Queen Kaahumanu Center in Kahului, Maui, Penney is keeping open its 86,000-square-foot store, for now at least.
"They have a lease with us. We are in discussions regarding the long-term future of the store," said Scott A. Crockford, vice president/retail of the mall's owner, Maui Land & Pineapple Co.
Crockford would not disclose the terms of the lease.
Retail analysts said the Penney closings are a result of the company losing money and not being able to finding a new direction for its stores.
"They're not doing well here in Hawaii" or nationally, said retail consultant Stephany Sofos, president of S.L. Sofos Co. Ltd. "You're seeing pressure on the middle markets."
Other middle-market stores have run into trouble, illustrated by closings this year of stores such as Chun Kim Chow Ltd.'s Ethel's and Robin's stores, she said. High-end stores are doing well here as are the discounters, such as Kmart and Sam's Club, but those in between are having a hard time.
Randy Yeager, president and chief executive officer of Retail Strategies Inc., said something similar.
"I think that one way to look at it is that J.C. Penney in the recent past has not differentiated itself in a way that created a real demand for its brand or its mix of merchandise," said Yeager, whose retail consulting and leasing firm's portfolio includes the Royal Hawaiian Shopping Center.
"Once a retailer gets in a difficult condition it often is hard for them to engage in the innovation and investment that is required in a quickly evolving retail environment," Yeager said.
J.C. Penney, founded 100 years ago by James Cash Penney with a single outlet called the Golden Rule Store, has closed more than 100 stores across the country over the past few years.
Hawaii escaped the last big shutdown, 50 stores in early 2001, but Penney kept looking for places to cut. Tim Lyons, a company spokesman at Penney's Plano, Texas, headquarters said yesterday that the Hawaii stores that will close have not been profitable.
Nationally, J.C. Penney Co. Inc. has shown some improvement financially and still has some 1,100 stores, but it lost $6 million in the second quarter of this year on sales of $7.2 billion. That was better than the $69 million loss on $7.2 billion in sales during the second quarter of 2001, but the company said it still needs to make cuts.
