I. Magnin's problems were obvious to first-time shopper Kathy Damelio, who moved to Newport Beach a month ago from Boston. "I was just walking through the store wondering why it was so empty," Damelio said. "Back East, department stores are crowded with people."
The loss of another well-known department store could dull the luster of Fashion Island, an outdoor shopping center that targets upscale customers. The center surprised some shoppers in 1992 when it replaced a closed Buffums department store with Circuit City, a discount electronics chain. In recent years the mall has also added a Hard Rock Cafe, a Barnes & Noble bookstore, and a Cheesecake Factory restaurant.
Although Macy plans to abandon I. Magnin as a store format, it will retain and expand the profitable I. Magnin catalogue business. By doing so, Macy can also use the expertise and labor of catalogue division personnel to help launch and operate a television shopping channel.
Macy last year announced that it had forged a partnership with Don Hewitt, producer of CBS' "60 Minutes" program, to develop a cable shopping channel. Like catalogue operators, television shopping enterprises take orders and deliver merchandise by mail. Federated has indicated that work on the shopping network will continue after it merges with Macy.
The impending merger of Federated and Macy--a deal approved in August by the companies' two boards--may have marked the beginning of the end for I. Magnin. The retailer has been hobbled in recent years by the weak California economy, flagging nationwide demand for apparel and fierce retail competition, and there was speculation that the chain would be closed or sold before the Federated-Macy merger agreement.
The speculation increased after Federated successfully wooed Macy because the combined company is expected to consolidate or close inefficient or unprofitable operations. Macy does not release the earnings of its separate units, but some industry analysts have said that I. Magnin has been unprofitable in recent years.
The venerable department store company was known almost from the beginning as a favorite place for upscale shoppers. I. Magnin stores in San Francisco were the first retail businesses in the city to be furnished with fine cabinetwork, elegant showcases and gilded mirrors.
I. Magnin began to sell ready-to-wear clothing in 1909. The company grew rapidly in the early 1900s, opening branch shops in exclusive hotels in Santa Barbara, Del Monte, Coronado and Pasadena, and then full-line stores along the California coast during the go-go retail explosion of the 1950s and '60s.
In 1944, I. Magnin and Bullock's merged as a corporation. I. Magnin and Bullock's were acquired by the Cincinnati-based Federated Department Stores in 1964. In 1988, Macy acquired Magnin and Bullock's from Federated, only to eventually strike a deal to merge with that company.
Times staff writer Greg Johnson in Costa Mesa contributed to this report.
