Bloomingdale’s San Francisco Centre Closure A Blow To City’s Recovery

Less than two years after department store group Nordstrom announced a double location exit, the city’s retail doom loop has taken another downward spin with the impending loss of Bloomingdale’s San Francisco Centre.

The department store retailer has confirmed that it is to close its flagship location in the beleaguered San Francisco Centre mall, the city’s largest, highlighting a shift in the retail landscape and evolving strategies for its future operations.

The 330,000-sq.-ft. store is scheduled to close at the end of March, marking the end of nearly two decades in the heart of the city with the departure from a mall that previous owner Westfield handed back the keys to in June 2023. The news also came fresh on the heels of luxury brand Michael Kors’ decision to close its store in the mall.

It is also untimely news just after local brokers reported that the city had finally reversed its rising retail vacancy rate, which hit a record 7.9% in the third quarter of 2024 but declined to 7.7% by the end of the year according to real estate advisor Cushman & Wakefield.

The trend indicated “nascent signs of recovery,” with positive net absorption of 65,700-sq.-ft., which meant more space was taken up than vacated over the quarter for the first time in two years, the broker said, although figures for the Union Square-Post Street area saw overall vacancy rates up fractionally to 22.1% by the end of the year.

San Francisco Centre Vacancies

However, pockets of the city are leading a revival, notably Jackson Square, Inner Richmond, Mission Bay, and Japantown, while Rolex and Patek Philippe boutiques have opened near Union Square, next to a new Breitling and relocated MaxMara and Burberry stores.

But Bloomingdale’s, which opened in 2006 in the 1.5-million-sq.-ft. former Westfield mall, is by far the San Francisco Centre’s largest remaining tenant, and its closing of its second-biggest store after its New York flagship, is a blow. In the meantime, city officials have been lobbying Macy’s, which owns Bloomingdale’s and beauty chain Bluemercury as part of a three-fascia group, to retain a presence in nearby Union Square.

Moreover Bloomingdale’s closure represents another setback for the struggling mall, now about half vacant after an exodus of retailers and with Westfield and Brookfield stopping payments on their loan for the mall last year.

Receiver Trident Pacific currently manages the mall and has been successful in signing a number of smaller tenants, while a theater operator is understood to have been negotiating to take the 52,000-square-foot theater vacated by Cinemark in the summer of 2023. The city is also more optimistic under a new administration led by Mayor Dan Lurie – who is one of the heirs to the Levi Strauss jeans fortune – and who displaced incumbent London Breed with pledges to prioritize business recovery.

Macy’s Exits San Francisco

Early last year, Macy’s announced plans to shutter its 400,000-sq.-ft. flagship store fronting Union Square Plaza as part of a major nationwide program to close 150 “underproductive” stores across the country through 2026.

Macy’s has hired brokerage Eastdil Secured to market the sale of the property, and city leaders have said that they would support future redevelopment of the site, but were hopeful that Macy’s would remain at the property.

“We are saddened to confirm that Bloomingdale’s will officially close its doors in Union Square, San Francisco,” a spokesperson for the retailer said in a statement over the exit from the San Francisco Centre to the San Francisco Chronicle. “While we are committed to this decision, Bloomingdale’s doors will remain open until late spring 2025. We are hopeful to be back to serve the San Francisco community in the future.”