Stores fate still unsettled
- Jeanie Senior
- Portland Tribune - News
• Parent firm dismisses the worries of downtown Meier & Frank workers
Ten months after May Department Stores Co. announced the closing of its division offices in Portland, workers in the downtown Meier & Frank store remain uncertain about their future.
A rumor keeps surfacing that May, the parent of Meier & Frank Co., may close the flagship store, a fixture in downtown Portland for nearly a century.
'It's so unsettling,' one clerk said.
Meanwhile, observers also are speculating on whether May might merge with like-sized rival Federated Department Stores.
Don Mazziotti, executive director of the Portland Development Commission, has heard the merger rumors, but he readily acknowledges that his information comes only from what he's read in the business media.
And as for the gossip about May closing Meier & Frank's downtown store, Mazziotti said, 'They have never told us that they have any intention of closing that store.'
Word to the contrary would spark an alarm: The city views keeping Meier & Frank's flagship alive in downtown Portland as crucial to the health of the core retail area.
The PDC's first priority is to retain Meier & Frank and renovate the building, Mazziotti said.
The merger rumor hasn't come up in his weekly talks with senior May executives, he said, but 'they would not speculate. Speculation is not in their interest.'
May spokeswoman Sharon Bateman, speaking from company headquarters in St. Louis, dismissed the merger talk as 'just simply rumor.' She added: 'There is no story there.'
Bateman also said there has been no official corporate statement about keeping the downtown Portland store open. 'What you're asking me sounds like a little speculation, which I wouldn't comment on.'
May, which has owned the Meier & Frank chain since 1966, cited the dismal retail climate when it announced last October that it no longer would engage in discussions with the city about renovating the flagship building. Such a project would involve updating the retail area and remodeling upper floors for either housing, a hotel or offices.
At the same time, the retailer encouraged the city and PDC to keep looking for options to refurbish the store.
Meier & Frank has closed off several floors, so that its selling space now occupies only about 230,000 square feet of the 665,000-square-foot building, which has been called 'a functionally obsolete facility.'
'Frankly, our focus is working with the company, so we're basically taking signals from them in our discussions,' Mazziotti said.
'We're talking with them about how unused floor space could be put to productive use, explaining to them financing alternatives we might have available to make it a more viable operation and justify capital expenditures. É We have not focused on alternative X or Y; we want to keep the options open.'
An architect's analysis of needed improvements to the historic building calculated the cost of refurbishing it as retail and office space at $64.9 million.
'We've looked at a number of alternatives we have available to us,' Mazziotti said. 'That includes acquisition of the building and leasing it back. It includes a loan for seismic upgrade and the other improvements required under the code Ñ a variety of things we might be called upon to do or are willing to entertain.
No specific proposals have been made. Discussions are ongoing.'
For their part, Mazziotti said, May officials have said that 'capital expenditures in existing facilities are being made very, very judiciously. Those are board-level decisions,' he said.
'Right now, the way retailing is, I would say nobody's going to do anything,' said Portland retail consultant Alan Zell, owner of Ambassador of Selling.
Cincinnati-based Federated, parent of The Bon MarchŽ, Bloomingdale's and Macy's, among other chains, 'is aggressive,' Zell said. 'May used to be aggressive. Going back a whole lot of years in L.A., it was one of the leading innovators of merchandising.'
Meanwhile, May is preparing to build a new Meier & Frank store near Hillsboro and start a long-planned 60,000-square-foot expansion of its Vancouver, Wash., store. Both projects are to get under way this summer.
The Hillsboro store, a 160,000-square-foot anchor for the Streets at Tanasbourne mall, is expected to open in May 2004. It's the first new store for Meier & Frank since 1980. The Vancouver expansion should be completed by late 2004.
Meier & Frank has seven stores in Oregon, one in Vancouver, plus seven stores in Utah that were renamed after May bought the ZCMI chain.
Last year, 600 people lost their jobs when May closed the Meier & Frank division offices in Portland and merged the operation into Robinsons-May in Los Angeles.