McInerny to close 3 stores
By Andrew Gomes
Advertiser Staff Writer
McInerny, one of Hawai'i's oldest retailers, is closing its largest store at the Royal Hawaiian Shopping Center, plus two others in Waikiki, as part of a move to remain viable in today's tough resort retail market.
The company, with 17 stores around the state, is closing one of two flagships at the Royal Hawaiian center, a roughly 35,000-square-foot space, leaving it with a 25,000-square-foot store at the same mall.
Mike Windsor, McInerny president and chief executive officer, said that with the downturn in tourism and Japanese visitor spending, sales have not been strong enough to justify both stores, which duplicated departments and accounted for 25 percent of the shopping center's total retail space.
"That's a lot in these days," he said. "I think it's too much."
McInerny also plans to shut two smaller stores at the Kahala Mandarin Oriental Hawaii hotel and Hilton Hawaiian Village.
Windsor said those two stores, which were on short-term leases, hadn't done well. They will be closed around the end of June.
The effect on employees is not expected to be significant because the company has been streamlining operations since Sept. 11, according to Windsor.
Windsor said the closures likely will reduce hours for some of the company's 180 workers.
McInerny, along with DFS Hawaii and numerous smaller retailers at Hawai'i resorts, has been under pressure to streamline operations and maximize cash flow to survive following the downturn in business after the Sept. 11 terrorist attacks.
The 145-year-old McInerny has weathered many changes.
Established in 1857 as a department store, McInerny opened a flagship store at Ala Moana Center in 1959 and grew to operate more than 30 stores.
In the mid-1980s, InterPacific Hawaii Retail Group Ltd. acquired McInerny from Seibu Group, and operated it with previous acquisitions Andrade and Carol & Mary. InterPacific also operated Water Wear Hawaii and local Salvatore Ferragamo stores.
InterPacific dropped its license agreement with Salvatore Ferragamo, and merged Carol & Mary and Andrade into McInerny in the 1990s.
Three years ago, the Ala Moana store was closed along with others to concentrate on the visitor market. The company in November opened a small store at The Royal Hawaiian hotel, after closing a store at the Hyatt Regency Waikiki.
Windsor said sales had fallen from $24 million in 2000 to $18 million last year. He expects sales will total roughly $15 million this year as the company continues its struggle toward profitability.
"We're trying," Windsor said.