McInerny says end near for 145-year-old retailer
By Andrew Gomes and Susan Hooper
Advertiser Staff Writers
One of Hawai'i's oldest names in retailing, McInerny, plans to phase out all its stores in a plan to discontinue operations starting early next year, ending 145 years of business.
Cory Lum • The Honolulu Advertiser
Many of the retailer's 13 stores, including its flagship in Waikiki, are scheduled to close Jan. 31.
McInerny plans to close its remaining store at the Royal Hawaiian Shopping center in Waikiki in late January.
Others will continue a while longer, and could be taken over by suppliers under another name. But ultimately, McInerny won't survive.
"We just came to the conclusion that there just wasn't any future for us," said McInerny President Mike Windsor. "It's sad, but it's change. It's just what happens in a business life."
Once one of Honolulu's biggest department stores, McInerny had become a resort retailer fighting to return to profitability in the face of Japanese spending declines that have been amplified since Sept. 11.
The company, with about 140 employees, had closed three stores in the past month, including one of two main stores at Royal Hawaiian Shopping Center.
By the end of January, the company intends to close its remaining 25,000-square-foot store at Royal Hawaiian center and four smaller stores at Sheraton hotels in Waikiki.
"It's something that we've known about for awhile," said Bob Shaver, property manager for Royal Hawaiian center operator, Pauahi Management Corp. "It (was) inevitable."
Local retail analysts said McInerny represented a bygone era in Hawai'i retailing, one that has fallen out of favor with today's shoppers.
"I think it's the same thing that went wrong for Andrade," said Rodney Pontillo, managing director of Grubb & Ellis/CBI's retail services group. "I used to work for Andrade way back when ... and there were three big ones: McInerny, Andrade and Liberty House.
"That was in the late '60s, early '70s. ... We sold quality and service. We sold suits to Gov. (John) Burns and Mayor (Neal) Blaisdell.
"But that was the old style," he said. "Now we're in the new style, and everything is rush, rush, rush. People don't care about that old style. They want to see Macy's, they want to see all these big discount stores where they can buy everything cheap. It's like when (longtime Hawai'i retailer) Arakawas bit the dust. We just live in a different world, where we can buy things on eBay."
Windsor called McInerny the "last of the generic retailers" in Hawai'i.
Other analysts said McInerny tried to change with the times but even then could not survive in the shifting winds of island retail.
Stephany Sofos, president of real estate and business consulting company S.L. Sofos & Co. Ltd., said that in the 1980s McInerny transformed itself from a Hawai'i regional department store to a "store-within-a-store concept," with separate areas in each store devoted to a single high-end manufacturer such as Cole Haan or Polo.
That approach began to falter in the 1990s, when high-end manufacturers opened their own stores in Hawai'i, she said. The entry of "value retailers," such as those at the Waikele outlet stores, further chipped away at McInerny's market, she said.
"It's hard to be a regional department store that is trying to keep the large size of the store, trying to have the store within the store and then compete on the same economies of scale with all these other components," she said. "It's hard to do — it's almost impossible, and that's why they're going out. Financially, it becomes too difficult."
McInerny also succumbed to the growing "globalization of retail," she said. "We're all seeing Hawai'i is becoming so much more homogenous with the Mainland and the rest of the world. As much as we talk about wanting uniqueness, the reality is that everybody wants the simplicity of sameness. ...
"Right now everybody's looking for value and convenience and similar quality, so if you have all those things that they're looking for, it's hard for the little guys (like McInerny) to compete."
Advertiser library photo • February 1951
Don Graham, partner with Graham Murata Russell, helped develop Ala Moana Center for Dillingham Corp. and was the center's first manager when it opened in 1959. He remembers McInerny as one of the first merchants in the center, housed in a two-story space on the mauka side at the Waikiki end.
McInerny began opening small boutique-type stores in Waikiki after World War II that were designed to cater to a booming tourist market.
"It is the end of an era," Graham said. "They were a good merchant, and it was a good signature, and we enjoyed their business for a long time, and it's sad to see them disappear."
McInerny was established in 1857 by Patrick Michael McInerny, a ship carpenter from Ireland who opened a shop at the corner of Beretania and Mauna Kea streets in downtown Honolulu to sell household items, ships' stores, jewelry, clothing and other everyday items.
According to Advertiser columnist Bob Krauss, who wrote a book on the McInerny family, McInerny's store served wealthy foreigners and became the haberdashery for the royal court.
Through much of the first half of the 20th century, McInerny and Liberty House were Honolulu's big downtown department stores, the places to shop for that pair of fancy dress shoes or that one durable blue suit for trips to the Mainland.
McInerny moved quickly to capture the booming tourist market after World War II and began its expansion into Waikiki by opening small shops that offered swimwear, aloha wear and casual jewelry to visitors.
From the 1950s through the mid-1970s, McInerny served the two markets, local and tourist, opening dozens of resort stores across the Islands at the same time that it expanded its local presence. It opened its flagship store at Ala Moana Center in 1959 and was one of the anchor tenants of the new Kahala Mall in 1969. At one time in the mid-1960s, McInerny even sold appliances and home furnishings at its Ala Moana store, but the retailer's primary business remained in clothing.
A subsidiary of Japanese retailer Seibu Group bought McInerny in the early 1970s, and, by the end of the decade, McInerny had clearly shifted its emphasis to its beach and resort stores, ceding the local department store business to Liberty House.
Seibu expanded McInerny to more than 30 stores, then sold the company in the mid-1980s to InterPacific Hawaii Retail Group Ltd., which operated Andrade, Carol & Mary and Water Wear Hawaii.
InterPacific merged Carol & Mary and Andrade into McInerny in the 1990s. Three years ago, it closed the Ala Moana store and others to concentrate on the visitor market.
Windsor in April said sales had fallen from $24 million in 2000 to $18 million last year. He projected sales would fall again to roughly $15 million this year.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
