Federated slates Hecht’s for conversion, divesting

Friday, August 5, 2005

Click here to enlarge this photo Gazette file photo The Hecht’s store in Westfield Wheaton will be sold off following the acquisition of its parent company by Federated Department Stores, which recently opened a Macy’s in the mall. Other Hecht’s stores in Maryland will be converted to Macy’s.

Plans also call for divesting the Hecht’s store at Westfield Wheaton, and closing the Macy’s stores and converting Hecht’s to Macy’s in Glen Burnie, Owings Mills and Perry Hall.

And, in another move involving national retail chains, some Kmart stores will be converted to Sears. One former Kmart in Clinton recently reopened as a Sears Essentials store.

Once the dust clears in eight or nine months, most shopping centers in the state will be better off, said Thomas S. Saquella, president of the Maryland Retailers Association.

‘‘We’ll probably see some other retailers come in and take those sites that are being closed,” Saquella said. ‘‘Some are in lifestyle centers, which frees up more space for movie theaters and some new retailers that are being attracted to that type of center.”

For Westfield Wheaton, which had finally filled its last anchor store with Macy’s in May, the impending departure of Hecht’s may leave a new hole in the mall and put another kink in Wheaton’s redevelopment fortunes.

The departure of Hecht’s, which has Maryland ties dating back to ¹857 when a furniture shop in Baltimore opened, followed by its initial department store there in ¹885, was brought about by Macy’s parent company, Federated Department Stores of Cincinnati. Federated acquired May Department Stores Co. of St. Louis, Hecht’s parent company, in an $¹¹ billion deal earlier this year and made its conversion and closing announcement last week.

The Wheaton saga may have another twist. Westfield Group of Australia is negotiating to purchase some of the Hecht’s stores in its malls from Federated, including the Wheaton location, officials said in a statement. Unlike the smaller stores in the mall, parent companies of the larger stores own those buildings. Federated and Westfield officials declined to comment on the negotiations.

Montgomery County economic development officials plan to discuss the situation with the eventual owner of the Hecht’s property, be that Federated, Westfield or another company, said Natalie Cantor, director of the Mid­County Regional Services Center, a leader in Wheaton’s redevelopment efforts.

‘‘The mall has four anchors, and it’s important for all of them to be successful,” Cantor said. ‘‘They are generally what brings the customers there. So clearly, whatever is put in the mall will be important for the mall and consequently important for the downtown.”

To attract quality anchor stores, the county sometimes offers incentive packages through the department of economic development, Cantor said.

The change may be unexpected, but it still can fit into Wheaton’s overall redevelopment plan, she said.

Although other Hecht’s outlets in Maryland will become Macy’s, that will not change the draw Westfield Wheaton has already brought to the community’s downtown, Cantor said. The Wheaton Macy’s was the first in Montgomery County and only the fourth in the state.

Macy’s spokeswoman Katherine Wadhams said the Wheaton store has done ‘‘very well” since opening, but she declined to give any sales or customer figures. Sharon Bateman, a May spokeswoman, also said the company does not release sales figures on Hecht’s in Maryland.

Other Hecht’s in Montgomery that will be converted to Macy’s include ones at Lakeforest mall in Gaithersburg and Westfield Montgomery in Bethesda. Then in Chevy Chase, a new three­story, ¹80,000­square­foot store being built on Wisconsin Avenue to replace a smaller Hecht’s will become a Macy’s, Bateman said. That store is expected to open by 2007, while the conversions should be completed by the end of 2006, she said.

At Westfield Montgomery, customers are sorry to see Hecht’s go, but Macy’s will provide a strong new brand, said Louise Gordon­Radics, mall marketing director. ‘‘We understand they will keep the managers, and many employees will get a chance to work there,” she said.

Likewise, many of the 235 employees at the ¹79,000­square­foot Wheaton Hecht’s, which opened in ¹987 and recently underwent renovations, will be able to work at Macy’s or another company store, Federated officials have said.

But whether there will be enough positions to take in everyone is a question mark, Saquella said. ‘‘It’s hard to tell how that will work out,” he said.

Some employees at the Wheaton Hecht’s were shocked by the news and are uneasy about the future, said a five­year employee there who asked to remain anonymous because he feared losing his job.

‘‘It seems like management has a better shot for jobs,” he said.

Macy’s has more higher­end merchandise than Hecht’s, but shoppers should not see too much of a price difference, Saquella said. ‘‘Macy’s wants to keep Hecht’s customers, so I would expect them to be price conscious,” he said.

Officials knew that the Macy’s in Wheaton would not remain the only one in the county, Cantor said. ‘‘I think we’ve got a two­year jump start, which is fine. It’s kind of what we always assumed,” she said.

The store has already attracted customers from outside Montgomery and will have a good base of established clientele, as Hecht’s did, Cantor said.

The mall, which recently opened numerous other new stores and restaurants, has endured the loss of key anchor stores before. When J.C. Penney moved into Westfield Wheaton about two decades ago and took the place of local favorite Woodward & Lothrop, there was some concern that the mall would lose patronage, Cantor said. But that wasn’t the case, as sales eventually balanced out, she said. The same situation will likely occur related to Hecht’s, Cantor said.

What Macy’s means in Prince George’s

In Prince George’s County, where officials have long sought more upscale retailers, Hecht’s stores in Bowie, Hyattsville, Marlow Heights and Laurel are slated for conversion.

While the arrival of Macy’s may satisfy some of the county’s 850,000 residents who have clamored for higher­end retailers, some business officials remain unconvinced.

‘‘I don’t think it means anything for them,” said John Henry King, Bowie’s economic development director. ‘‘Name brands are name brands.”

Arthur Turner, chairman of the Prince George’s Chamber of Commerce’s economic development committee, said he is not convinced that Macy’s stores in the county will be as upscale as other Macy’s stores in surrounding counties.

‘‘We don’t know what it means yet,” Turner said of the change. ‘‘I would hope that Macy’s brings their very best.”

Others were more optimistic about the name change.

‘‘As long as they put money into the store and stock it with products, then it would be great,” said Ray Leverty, general manager of Marlow Heights Shopping Center.

The Macy’s stores in Bowie Town Center, the newly renovated Mall at Prince George’s and the Laurel Mall will be surrounded by relatively more upscale stores than the Macy’s in Marlow Heights, where that center presently has discount retailers, fast­food restaurants and a liquor store.

But the Macy’s in Marlow Heights will be no different from others, said Jim Sluzewski, a Federated spokesman. ‘‘They will be Macy’s stores, so they will have Macy’s merchandise,” he said.

Frank Meyer, general manager of Laurel Mall, said the change, if it occurs, will be a positive. ‘‘Either way, the Hecht’s store would be a major asset to the property,” he said.

In Frederick, the Hecht’s store in the Francis Scott Key Mall is scheduled for conversion to Macy’s, as well. Across the nation, Federated is converting about 330 May Co. stores into Macy’s, including ¹9 Hecht’s in Maryland.

May Co. also owns the Lord & Taylor chain. Its four stores in Maryland — in Gaithersburg, Bethesda, Columbia and Annapolis — will remain unchanged for now. Plans could be adjusted, and a ‘‘small number of stores” are being studied for possible conversion to Bloomingdale’s, a Federated chain, officials said. Maryland has only one Bloomingdale’s, at White Flint Mall in Bethesda, which also includes a Lord & Taylor.

Sears converting some Kmart stores

Another major retail merger between Sears and Kmart earlier this year is having some local effects. A former Kmart at 8827 Woodyard Road in Clinton converted to a Sears Essentials in May.

By the end of 2007, Sears plans to change about 400 Kmarts across the nation into the hybrid stores, which are smaller versions of the company’s Sears Grand stores. They sell traditional Sears products such as appliances, along with everyday items such as shampoo and soft drinks that are associated more with Kmart.

Officials who have discussed opening a Sears Grand store at the Ritchie Station Marketplace in Capitol Heights could not be reached for comment about progress on that project.

In other retail news, Westfield Montgomery recently opened some new stores, including Shenk & Tittle, Brookstone and Radio Shack. Others are planned in the fall, including a Liljenquest & Beckstead jewelry store and Caribou Coffee, Gordon­Radics said.