Macy’s closure could reshape Philly’s downtown shopping district

Inside the Macy’s in Philadelphia, underneath one of the largest pipe organs in the world, which just a few months ago was blasting “Deck the Halls” for a holiday light show, stands a small yellow sign announcing the close-out sale of this iconic department store.

It’s one of hundreds of signs posted around the vast sales floor, giving the Renaissance-inspired shopping palace the feeling of a much less glamorous retailer, closer to a discount chain than the ritzy department stores of old.

Macy’s last month announced plans to close the store in March, ending more than a century of department stores continuously occupying the ground floor of the Wanamaker Building. The 12-story, granite-walled structure was the brainchild of retail pioneer John Wanamaker, who opened the first department store in the US at the location in 1911. Eventually, it would become one of several stores along Market Street known as the “Big Six,” of which Macy’s is the last remaining inheritor.

“It was just nice,” Brenda Hill, 79, said about the old Wanamaker’s, which closed in 1995. “Mr. Wanamaker had class. Everything he did, even the ladies’ bathrooms, you used to go in and feel like you were in another world.”

Madeleine Rose, 29, is too young to remember Wanamaker’s, but she feels similarly about Macy’s. “I like coming here because it’s beautiful,” she said. “I love the architecture, and I like window shopping.”

Luckily for them, certain of the store’s grander elements are likely to remain. The interior is protected under the city’s historical commission, and commercial property owner TF Cornerstone, which purchased the first three stories in 2019, has confirmed that the organ will stay.

As for what other changes might be coming to the building, that’s still an open question—and a tantalizing one for those interested in the future of retail in Philadelphia and in downtown shopping districts in general.

The slow death of the department store: The Center City District (CCD), a municipal corporation tasked with maintaining downtown Philadelphia, has been exploring this question since Macy’s started closing stores in 2015.

“I think that’s when the rumor mills started buzzing around here,” Clint Randall, VP of economic development for the organization, told Retail Brew. “We didn’t think it was a foregone conclusion, but we thought it was a possibility.”

In response, the Center City District started working on a report about the struggles facing department stores nationwide, with the goal of ensuring that if Macy’s closed, Philadelphians would understand it wasn’t necessarily something the city did to itself, but instead part of a broader trend. “To be blunt about it, no one should be surprised that department stores are closing,” Randall said. “They’ve been closing steadily for decades.”

The challenges facing them are myriad, he added, from decades-old factors such as emergence of big box “category killers” to more recent developments such as the rapid rise of e-commerce and home delivery.

He also acknowledged that Market East, the corridor stretching from City Hall to the historic district, has faced unique challenges. Fewer office workers due to more hybrid work is one issue. Another is what Randall called a “co-tenancy problem,” in which Macy’s doesn’t quite jibe with the other nearby retailers, many of which are discounters.

“The retail identity of Market East is in this ever-shifting state of flux,” he said.

Splitting up the footprint: What kind of store would fit the bill for Market East is an open question though, as there is still interest in higher-end stores such as Macy’s. One CCD survey asking residents what kind of retail options were missing from Center City found that 39.2% wanted to see more luxury retail, and 36.3% wanted to see more department stores.

• In addition, 34.1% wanted more grocery stores, which is notable given that the last time TF Cornerstone took over a former Wanamaker’s—the one located near Astor Place in Manhattan—the company brought in the city’s first Wegmans.

Regardless of what type of store wins the day, it’s likely the Wanamaker Building will remain in the business of retail. “They are very keen on them keeping that as a retail location,” Philadelphia City Council member Mark Squilla told Retail Brew. “They have ideas of splitting the retail up.”

Breaking up the 435,000-square-foot portion currently occupied by Macy’s could be crucial to the building’s survival as a viable retail location. As Squilla noted, “a lot of these big places are trying smaller versions of themselves.” Indeed, Macy’s is trying this strategy with plans to build at least 30 small-format stores through this fall.

“We have a great opportunity here to reimagine Market East in a way that will bring it back to its own old days of being the place to go in the city of Philadelphia,” Squilla said.