Saks Inc. will close its two stores in Pioneer Place Mall, the company announced Tuesday.
The company operates a 60,000-square-foot store and a 23,000-square-foot men's store at 850 S.W. Fifth Ave. The men's store will close April 25. The main store will close July 31.
“Store closing decisions are never easy but are necessary from time to time," said Steve Sadove, Saks chairman and CEO, in a news release. "The planned closing of the Portland store is consistent with our strategy of focusing our resources on our most productive stores.”
The stores employ roughly 100. Workers will receive severance packages or offers to transfer.
Mall owner General Growth Properties Inc. expects to quickly lease the empty space to new tenants.
"(We) have several opportunities that we are reviewing," said spokesman David Keating in an e-mail. "They're opportunities shoppers at Pioneer Place will find very exciting; however, we're not ready to make our plans public yet. We are confident we will have new names to announce within the coming weeks and months.
In related news, Fred Bruning, president of CenterCal Properties, which owns Bridgeport Village, said he hopes to soon lease a former Wild Oats space at Bridgeport Village to Saks for an Off Fifth discount store.
The Off Fifth discount stores, Saks' version of Nordstrom Rack, are a bright spot for the company. Saks has built 10 Off Fifth stores in two years, including four new stores that opened in 2009.
In the company's fourth quarter earnings Sadove said the company plans to open three to five Off Fifth locations annually for the foreseeable future.
Retail experts weren't surprised by the announcement that Saks would close its Pioneer Place stores, saying they had little traffic and slow sales compared to other Saks stores. The Pioneer Place stores are the company's only outlets in the Pacific Northwest.
"This is a Nordstrom town, said retail analyst Jennifer Black of Lake Oswego's Jennifer Black & Associates LLC. "People here are used to Nordstrom and its service. It's very difficult to compete with Nordstrom."
Luxury downtown retailers lamented the loss of Saks.
"Downtown needs stores like that," said Carl "Nick" Greve III, owner of Carl Greve Jeweler Inc.
Mayor Sam Adams met with Saks CEO Sadove in New York City last August in an effort to keep the stores open.
“The property owners, the Portland Development Commission and I made unprecedented outreach efforts to keep Saks in Portland,” Adams said in a news release. “But we could not overcome national trends buffeting higher end and luxury retailers and the fact that Saks’ Portland lease was up for renewal."
The city has already begun recruiting replacement tenants.
“We expect to announce within the coming weeks and months new retail offerings at Pioneer Place that we are confident will excite Portlanders," Adams said.
Adams and the Portland Business Alliance, the city's chamber of commerce, said downtown remains a vibrant destination for retailers.
Much has changed since Saks opened in Portland in 1990. Mario's, the Mercantile, Tiffany & Co., Louis Vitton and Nordstrom have either come to Portland or made significant investments in existing stores, said Portland Business Alliance spokeswoman Megan Doern.
Doern predicted that the space could attract a large-format retailer that has few other options in downtown Portland.
"We're confident (mall owner General Growth Properties Inc.) has plans to take advantage of this opportunity," Doern said.
Saks (NYSE: SKS), based in New York City, was founded in 1924. The chain operates 53 stores in 25 states.
Last week, Saks reported sales declined 13.5 percent to $2.6 billion for the year ending Jan. 31.
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