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The Honolulu Advertiser
Posted on: Tuesday, January 14, 2003

Macy's expands with Maui purchase

By Andrew Gomes
Advertiser Staff Writer

Macy's has more than doubled its department-store space on Maui, completing a purchase of J.C. Penney's space at Queen Ka'ahumanu Center.

The acquisition of the 86,000-square-foot space gives Macy's its third-largest location in Hawai'i with 167,000 square feet of space at two separate ends of the Kahului mall.

The addition is the latest in an ongoing expansion effort by San Francisco-based Macy's West, which 18 months ago began operating in Hawai'i with significantly smaller spaces than usual when it took over 11 Liberty House department stores.

The deal also is the first to reuse one of J.C. Penney's four Hawai'i stores, which did their last day of retail business on Friday.

A purchase price was not disclosed. Macy's will immediately take over the space and could have the addition open by summer, according to Scott Crockford, real-estate vice president for mall general partner Maui Land & Pineapple Co.

Macy's representatives said the company's parent, Cincinnati-based Federated Department Stores, would not be available to comment on the purchase until today.

Macy's already has expanded two of its Hawai'i department stores — Pearlridge Center and Waikiki — and is known to be negotiating to buy the J.C. Penney space at Prince Kuhio Plaza in Hilo on the Big Island.

Representatives of Macy's and Federated have declined to confirm or deny any interest in the Hilo store space.

"Hawai'i is an important market for Federated and we are always looking for new opportunities here," Deena Nichols, Macy's senior vice president and director of Hawai'i stores, recently said in a prepared statement.

Prior to Macy's West entering Hawai'i, its average store was 200,000 to 250,000 square feet, with the smallest full-line department stores at about 100,000 square feet.

With the Liberty House acquisition, the average Macy's department store size was 100,000 square feet in Hawai'i.

Some retail analysts said the company would have difficulty including all its departments in the smaller stores — all but three of which were under 100,000 square feet in gross leasable area.

Since then, Macy's leased the former Shirokiya space at Pearlridge, adding 19,000 square feet to make that store its second-largest in Hawai'i at 170,000 square feet. Macy's also slightly expanded its 40,000-square-foot Waikiki location.

The Maui store, at about 81,000 square feet, was the retailer's sixth in size for full-line Hawai'i department stores, behind Ala Moana, Pearlridge, Kahala Mall, Windward Mall and downtown Honolulu locations.

Ka'ahumanu Center is the fourth-largest shopping center in the state. The center underwent a $60 million renovation and expansion about 10 years ago that created the J.C. Penney wing, a theater, food court and many specialty shops.

Crockford said the Macy's addition will give the retailer greater depth and variety in merchandise and help expand sales. "We are looking forward to seeing an outstanding new Macy's store in this building as soon as renovation is complete," he said.

J.C. Penney spaces at Ala Moana and Pearlridge are still being considered for various retail uses.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.