Luxury department stores Macy's and Bloomingdale's have pulled out of a mall set to open next year in Abu Dhabi, The National can reveal.
The upscale brands, from the US, were scheduled to open flagship stores in Al Maryah Central, which is due to launch next August on Al Maryah Island.
Both stores were part of a commitment by Al Tayer to lease 48,300 sq m of space in the upcoming mall, which is connected to The Galleria.
The 19,000 sq m Macy’s store was scheduled to span four floors of the mall. It would have been the brand’s first store outside the United States.
The Bloomingdale’s store was scheduled to be bigger than its Dubai Mall outlet, which is the brand’s most successful branch after the flagship Manhattan store.
“We worked with Al Tayer for a long time and we agreed with them that they won’t be proceeding with Macy’s and Bloomingdale’s,” said Daniel Parry, managing director for developer Gulf Related, a partnership between Abu Dhabi private equity house Gulf Capital and the US real estate investment firm Related Companies.
“It was disappointing but we were in discussions with Al Tayer for a long time and we planned accordingly. It’s given us opportunities. As the market has changed over time the replacement of the two big department stores with a lot of different retail has actually helped the overall mall,” said Mr Parry.
Macy’s will be replaced by a two-storey Debenhams store in addition to three floors of entertainment, while the space reserved for Bloomingdale’s will be filled with a mix of shops, some of which will be Alshaya brands like West Elm and Pottery Barn.
Mr Parry said Al Tayer remains committed to the project and will bring 22 other brands including Kiehls, Café Nero, Gap and Gap Kids.
Macy’s announced impressive first quarter results this year, exceeding analysts’ — and even the company's — expectations.
The turnaround followed a sales’ slump for the brand that led to the closure of 68 shops and a cull of around 10,000 jobs last January amid a downturn in US retail.
Macy’s chairman warned, last April in an interview with Gulf Business, that the UAE should pay heed to the lessons learnt in the US.
“I don’t think there are too many malls yet but I do think that long term that is definitely a potential danger,” he said.
“There is a clear lesson in history on this subject in the US that the proper supply and demand must be considered when opening physical locations in the future.”
Macy’s and Bloomingdale’s intention to enter the Abu Dhabi market was announced in 2014, when plans were first unveiled for the 2.3 million-square foot Al Maryah Central mall.
Their exit has prompted the developer to re-engineer the entire mall, which is currently almost 70 per cent leased, said Mr Parry.
“We planned the mall six years ago so about two years ago we started to look at what the changing landscape of retail was and one of the things that came up was let’s try to get more entertainment in,” he said.
“Our goal is always to have the top 200 brands of fashion and that’s what we are focused on.”
Value retail has been introduced to the mix and some franchise owners, such as Alshaya have leased more space. Alshaya will now open a total of 38 shops in the mall, according to an announcement by the developer this week. They include brands such as Debenhams, H&M and Charlotte Tilbury, as well as restaurants including Bouchon Bakery, Blaze Pizza, The Cheesecake Factory and P.F. Chang’s.
The mall will also include a 3,250 sq m flagship Zara store, All Saints, Lululemon, & Other Stories as well as Alice and Olivia stores, and five public parks.
Dining will be a big focus with both a food hall, food court and standalone restaurants. There will be a variety of entertainment on offer, including a flagship Vox Cinema, as well as attractions designed to appeal to teenagers including virtual reality and bowling.
The developer will shortly announce an attraction designed for children by a major US brand that will be the first of its kind in the world, said Mr Parry.
“Part of what our mission is to be the best and market dominant mall in Abu Dhabi,” said Kevin Ryan, chief operating officer for Gulf Related.
“Yes, some of the brands are already here but we will be the place that is first in mind and first to go to. As markets mature, particularly competitive markets, there is usually a mall that emerges as the most popular and most dominant. That’s what we believe we are going to be.”
Al Tayer and Macy’s have been contacted for comment.