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The Galleria Mall At 5085 Westheimer Rd.

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There's been a lot of speculation.

My best sources at the Galleria are telling me that Bloomingdales (owners of Foley's will take the Lord and Taylor space. The Foley's will close and potentially turn in to more smaller shops.

I would like for Macy's to move to the Foley's spot so it's not so far removed from the rest of the complex.

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I read somewhere that the Lord and Taylor space at the Galleria will be re-configured into dining and smaller retail shops. The L&T space seems too small to be a Bloomingdale's.

I found it: "The former Lord & Taylor space will feature 100,000 square feet of varied new restaurants, specialty shops and a children's soft play area, according to the Galleria.

The remodeled area, which is expected to be complete by April 2006, will be designed in the same look and feel of the mall, including fixtures, colors and lighting enhancements. "

Lord & Taylor

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That sounds interesting, I wonder if it will get some street traffic from pedistrians, since it is the closest to the sidewalk. Having a cafe or a bar would be great, even though another anchor store will be greatly missed.

I love the area between Dillards and Neimans to see so much pedestrian traffic, That is the only place in uptown that has that feeling, and it is not even an intersection.

And Foley's is considering closing down. . that is news to me.

Here is an article about the T&C NM closing down


Houston Business Journal - 12:28 PM CST Thursday

Neiman Marcus to close Town & Country store

The Neiman Marcus Group Inc. is closing its 142,000-square-foot Neiman Marcus store located in the Town & Country Mall.

The store, which opened in 1983, will be closed by mid-September. The Dallas-based luxury retailer added that its 160 employees will be offered transfer opportunities to other stores or will receive severance packages.

"The decision to close this store was very difficult as we value the customer relationships we have established in this market," said Burton Tansky, president and CEO of Neiman Marcus Group. "However, this store did not meet our long term operational goals."

Neiman Marcus has had a presence in the Houston community for more than 35 years with its store located at the Galleria. That store will continue to stay in operation.

The company said Wednesday it is considering putting itself up for sale as it explores ways to boost shareholder value. Neiman (NYSE: NMG) added that it will not disclose developments until its board has approved a transaction. The company has hired Goldman Sachs & Co. as its financial adviser.

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I know someone who works at the Carolina Herrera store in the Galleria, and he told me that Barney's was talking with Simon and wants a store in Texas in both Dallas and Houston. Houston may get the Barney's CO-OP which is a smaller but more hip version of Barneys. Dallas might be getting the regular Barneys New York,which use to be in the Northpark Center as well as The Galleria in Houston.

Miami currently has the CO-OP store.

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Thats cool that they are turning that L&T space into more stores dont really care for the play zone idea but Im sure it will be more room for luxury retailers to come in maybe we'll get a Valentino or Prada store with one of those cool design schemes, that be cool for Barneys or Bloomingdales to come in. So Foleys is closing?? Whos is taking over that space?

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Foley's parent company (May Company) is merging with Macy's parent company (Federated Department Stores).

I'm not sure exactly how certain it is, but everyone presumes that all Foley's stores will be converted to the Macy's name. As we all know, there is already a Macy's in the Galleria, so there is speculation of what will become of either the current Foley's or the current Macy's. Hopefully, they will bring in Bloomingdale's (also owned by Federated Department Stores) to use the surplus property. The big questions are... will they convert the current Foley's into Macy's and the current Macy's (with its inferior location) to Bloomingdales, or will they keep Macy's where it is and convert the current Foley's into a Bloomingdale's?

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Despite the merger, and I understand why they would shut down Foley's first, I actually have felt that there was room for a Floey's and a Macy's in the same mall. Much in the same way there are malls with Macy's and Bloomingdale's in the same mall. Its a different shopper for each. Foley's sells some similar items as Macy's, but macy's is slightly more high end.

From a personal perspective, I would rather have Macy's and Bloomingdale's and put Macy's where Foley's is and Bloomingdale's where Macy's is now. The reason being that Macy's has obviously not been enough of a draw to make that wing grow beyond what it is. I would assume a new big name like Bloomingdale's make that wing do better. I have kind of enjoyed the easy access to Macy's parking lot all these years though.

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For a while May Company told everyone that it would keep the local names. Then it changed all the Kaufman's stores to Macy's. No great loss. But now they're changing all the Bon Marches in the Pacific Northwest to "Bon-Macy's" and people are outraged. That's a name with as much heritage as Marshall Field's or Neiman Marcus or Macy's, itself. May won't think twice about ditching the word "Foley's."

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The traditional department store segment isn't very profitable right now. They've lost business to high-end specialty stores and discounters on the low end. That's why the merger made sense - it would let them combine more operations and cut costs. The old local names, eg Foleys, are going to be missed but the bottom line is that it is cheaper for advertising, supplies, etc., to maintain fewer names and locations. (Similar story to the car business, where Olds and Plymouth got the ax). For better or worse, local brand retailers are a dying breed.

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  • 2 weeks later...

this might give you an idea on the direction Simon is taking with the Macy's or Foley's store once the Foley's nameplate is gone.

More at the malls


Department stores' shoes being filled by housing, discounters - even casinos

12:43 PM CDT on Saturday, July 9, 2005

By MARIA HALKIAS / The Dallas Morning News

The phrase "she lives at the mall" may soon gain new meaning at Houston's Galleria, where Simon Property Group Inc. is considering converting the Macy's or Foley's into apartments.A proposal for a $1 billion addition at Minnesota's Mall of America includes a full-fledged casino on the upper level.

In Boulder, Colo., a Wild Oats supermarket will move into the Sears space next to the Foley's in Macerich Co.'s Crossroads Mall redevelopment.

And in upstate New York, a real estate developer reportedly is raising $20 billion to build a megamall called Destiny U.S.A. that would feature 80,000 hotel rooms and a 40,000-seat arena.

The four corners of the mall aren't reserved for major department stores anymore as industry consolidation reduces their ranks and developers look for ways to make their projects relevant to more people.

Dark spaces in malls once would have worried operators, but they no longer seem as daunting. Now, the industry calls them "redevelopment opportunities."

"We're thinking about putting tenants in our centers that we never would have thought of five years ago," said William S. Taubman, chief operating officer of Michigan-based real estate investment trust Taubman Co., an upscale mall developer.

Which is why Taubman is packing white-tablecloth restaurants into some of its malls, and why Simon's new Firewheel Town Center in Garland will feature office space atop the stores.

Still, for all of the new cross-shopping and mixed-use projects in the pipeline, Mr. Taubman added, "It remains to be seen if all of it is going to be successful or not."

Those pushing the envelope of mall redevelopment will get a big test by next year, as Federated Department Stores Inc.'s acquisition of May Department Stores Co. produces more empty real estate.

About 100 U.S. malls have both Federated and May stores. Closings are certain at malls with overlap as regional chains, including Foley's, are rebranded as Macy's. Shareholders are expected to approve the merger at consecutive meetings in New York and Cincinnati on Wednesday.

Simon's CEO, David Simon, told an industry conference last month that "we're extremely confident" about the Federated-May merger fallout.

Simon's focus will be on retail, he said, but "there are going to be some opportunities in very dense areas where we'll look to maybe do office or multi-family residential."

John Bucksbaum, chief executive of General Growth Properties Inc., the No. 2 U.S. mall developer, said during a recent conference call with analysts that a Natick Mall project in Massachusetts is just the first of many that will have residential components.

In addition to Nordstrom and Neiman Marcus, the center will have two residential towers, and the grounds will include bike paths and other residential amenities.

Mr. Bucksbaum also expects apartments or condos to be added to projects in Hawaii, Virginia and Las Vegas. "We're looking at it in markets where the demand is there."

Hotels aren't strangers to malls, but that match-up is accelerating.

For the first time, Starwood Hotels & Resorts Worldwide Inc. set up shop at the International Council of Shopping Centers annual meeting in Las Vegas in May, the industry's main leasing event. A spokesman for Starwood ? which runs Westin, Sheraton, St. Regis and other chains ? said the company is interested in mixed-use projects but that it's "too early to say if we struck any deals."

Full-service restaurants in bunches are also being courted as alternatives to department store anchors. California-based Macerich has added a leasing position devoted to full-service restaurants.

Taubman's new mall in Richmond, Va., Stony Point Fashion Park, has six full-service restaurants including P.F. Chang's and Fleming's Prime Steakhouse.

"In terms of revenue, those six restaurants do as much volume as an anchor," Mr. Taubman said.

The expansion of Dallas' NorthPark Center, which includes a Nordstrom and an AMC theater, will bring six additional full-service restaurants. Three are already there.

Developers have also seen success in building up Las Vegas' shopping venues. And the combination of gambling and shopping is expanding outside Nevada.

In May, Chelsea Property Group opened the 381,000-square-foot Seattle Prime Outlet on the Tulalip Indian reservation, next to the tribe's casino.

"It opened very strongly," said Les Morris, a spokesman for Simon, which acquired Chelsea, the largest outlet mall developer, last fall.

Other uses

While Neiman Marcus, Nordstrom, J.C. Penney and Dillard's, among others, are said to have dibs on some spaces that open up in the Federated-May merger, they may be competing with other new rivals that include discount giants Target Corp. and Wal-Mart Stores Inc.

Target ? which has said malls are now part of its new store site-selection process ? is big on Simon's radar screen, Mr. Simon said.

One of the last big mall exits came with the demise of Montgomery Ward, which left Simon with 27 large spaces to fill. Target stores went into several of those vacancies, including one at Richardson Square mall.

"Target has been a great partner of ours, and I think they'll be more and more a player in the mall environment," Mr. Simon said.

According to a recent report by the International Council of Shopping Centers, regional malls and centers have reduced their dependence on department stores, which greatly increases mall operators' flexibility when dealing with anchor vacancies.

About 20 percent of all mall anchors are discount chains, big-box stores, cinemas, sporting goods stores and off-price chains, industry data show.

Taubman put a Robb & Stucky into a former Lord & Taylor anchor space at its International Plaza in Tampa, Fla. And in a sign of the times, sales from the furniture store exceeded those of the department store it replaced.

Indeed, a mall expansion in Canoga Park, Calif., by Australian developer Westfield Group will see a Target and Neiman Marcus under one roof.

In the air

It's not just the four corners that are getting new uses. Air rights are, too, according to Dougal M. Casey, head of research at ING Clarion in New York.

"It's like getting something for nothing. Putting condominiums or office space above the stores is like getting free land," he said.

The Dallas area's newest regional shopping center, in fact, will have 75,000 square feet of Class A office space above the shopping.

Firewheel Town Center is scheduled to open in Garland in October and will be anchored by Dillard's and Foley's. It will include big-box tenants Linens 'n Things, Barnes & Noble and Circuit City.

The trend toward open-air centers in recent years has "made the point that a lot of good retail can come to a development without three or four anchor department stores, sometimes without a department store," Mr. Casey said.

But he isn't convinced that the department store is always replaceable.

"Say, if I had a project with a Neiman Marcus, I could sure attract more tenants," he said.

"This is an industry that for 50 years was built on the idea that you need department store anchors. All this recapturing of department store space for other uses ? all of that is a book yet to be written."

E-mail mhalkias@dallasnews.com

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  • 3 weeks later...

I just read that Federated will be closing the Macy's store at the Galleria and rebrand the new Foley's store as Macy's.

What is the status on the Lord & Taylor store there? Has it closed yet, and if so, has anything replaced it or been planned?

All of this shakeup in the anchor tenants could allow for some interesting alternatives there.

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I think it would be a good idea for Dillards to move from across the street into the Galleria.

I wounder why they built outside of the Galleria in the first place. My guess is and this may be true) that when the Galleria first got built Dillards knew they would lose money to people going there, and there was no room for them back then so the built that one. Does anyone know the true story?

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The Dillards's, formerly Joske's, was built several years before the Galleria. Actually a few years before I-610 was event built. They are never going to move. It is the most profitable Dillards in the south and there glagship Houston store. They don't need to be in the Galleria to make their profits. Also, having it across the street allows for more pedestrian traffic all you urbanist cry so much for.

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Any more word on what will happen with the current Galleria 3 Macy's once it moves to the current Foleys in Galleria 4? The whole 3 part seems pretty weak. Lots of empty spaces, a couple of no-name stores that look like they would be better suited at Northwest Mall than the Galleria, and of course still Sharper Image. The Fox Sports Bar looks like a thinly-veiled attempt by the mall management to eat up as much of the space as possible. Not that it isn't finished out nice enough, but every time I have been by there it doens't look that busy. Any new news on this wing?

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Galleria ready to mix residential with retail


Allison Wollam/Houston Business Journal

High-rise residential plans in the works at the Galleria could give the term "home shopping" a whole new meaning in Houston.

Owner Simon Property Group Inc. is drawing up a blueprint for converting the current Macy's store into upscale condos.

Parties involved note that planning is purely preliminary at this point, but agree that adding a residential component to Houston's most prominent shopping mecca is highly feasible.

The door to residential redevelopment might have opened on July 13, when shareholders approved the merger of May Department Stores Co., parent of Macy's, and Federated Department Stores, parent of Foley's.

Retail industry sources say post-merger closings are certain at malls with now-overlapping regional chains.

In the coming shakeout, the newer flagship Foley's store in the Galleria is likely to be rebranded as a Macy's and the existing Macy's is expected to close.

A Federated official says no final decision has been made on the future of either store.

Timely references

David Simon, CEO of the country's biggest mall owner, has kept speculation on the front burner over the past few months.

A week after the May/Federated merger was announced in March, Simon singled out the Galleria as a prime candidate for high-rise condos. He reportedly made the reference while discussing the company's "asset intensification" plans at a real estate conference in Florida.

The Galleria was again singled out by Simon at another conference last month, where he reportedly cited the Houston property's strong potential for a successful multifamily residential component.

Les Morris, a spokesman for Simon Property Group, is non-committal about discussing specifics, but indicates the concept is being considered.

"Given the prominence of the Galleria in our portfolio, adding a residential component is definitely something we would look at," says Morris.

He points out that mixed-use asset intensification is standard in Simon's newer projects.

"All of the developments that we're currently building from the ground up have an office or residential component along with the retail," Morris says.

The Town Center at Coconut Point in Bonito Springs, Fla., includes 305 condo units totaling 45,000 square feet along with 1.2 million square feet of retail space.

Up the Florida coast in Jacksonville, the St. John's Town Center has a village component, a community center and a hotel.

In anticipation of possible post-merger fallout, sources say Simon has already contacted The Hanover Co. about constructing high-rise residential units in the Macy's building.

John Nash, president of the company known for developing multifamily residential projects, notes that Hanover is working with Simon on other properties in other markets, but is not working on any projects in Houston at this time.

"The Galleria is not in the pipeline right now," says Nash. "However, Hanover is always looking for trophy properties and would like to look at and review any mixed-use, multifamily development opportunities that arise in and around Houston."

Integrating components

Residential and retail already co-exist north of the city.

The Woodlands Town Center features residential complexes about a block away from The Woodlands Mall.

"We're definitely seeing a trend where residential components in close proximity to shopping and restaurants is becoming a sought-after amenity," says Tim Welbes, president of The Woodlands Development Corp.

He says high-rise units in the Galleria will probably appeal to people who own more than one home, rather than people looking to set up a primary residence.

Nick Hernandez, a local retail broker with Page Partners, says the retail industry is moving toward integrating multi-use components within shopping centers.

He says consolidation among anchor tenants is leaving empty stores that mall owners must find creative and adaptive ways to fill.

"The Galleria is one of the best candidates for a residential component because it already has office space and a hotel, and it's also located in one of the best high-end residential areas in town," says Hernandez.

"All of the right pieces are in place for this to be successful at the Galleria," he says.

awollam@bizjournals.com -- 713-960-5936

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