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Macy’s closure can’t be reduced to Twitter takes. It’s part of a long retail decline

The San Francisco landmark’s closure can’t be directly attributed to crime or homelessness as reactionary commentators and politicians claimed.

A devastated urban street with rubble, a toppled Macy's sign, and damaged classical and modern buildings under a cloudy sky.
Illustration by Clark Miller for The Standard

By Eddie Kim

These days in San Francisco, every major business closure triggers a rush to assign blame, whether the culprit is a district attorney, a mayoral administration or a prison reform policy. Few stop to mull whether the real assailant lies outside of the city, not within.

When Macy’s announced this week that it would shutter its flagship store in Union Square, it unleashed a wave of mourning and recriminations more befitting the death of a longtime city leader. The closure quickly became a metaphor for how warped San Francisco’s cultural politics have become; for many, it was another simple instance of crime and homelessness decimating a beloved landmark.

In turning Macy's into a symbol of urban degradation, however, reactionary commentators and self-serving politicians merely flattened a complex formula of factors into something easy to digest—for Twitter trolls and voters alike. 

Supervisor Matt Dorsey questioned on X whether more police staffing might have saved it and other businesses. Michael Shellenberger, who rocketed to national relevance for his book, San Fransicko: Why Progressives Ruin Cities, suggested city leaders were lying about “rampant crime” being only a partial factor. Tom Wolf, a former addict and activist who regularly takes to social media to lament the state of the city, even compared it to one of the most heinous events in American history: “It’s like 9/11 for the city.”

Elsewhere, the social media commentariat nationwide plowed ahead, blaming “coddled dope fiends,” jeering “go woke, go broke,” mocking liberal Democrats and generally pointing fingers at everything but Macy’s corporate leadership. 

Mayor London Breed and other local pols like state Sen. Scott Wiener tried to allay fears that Macy’s was leaving because of crime, noting the planned closure is one of 150 nationwide. But in a tough election year, it seems few had the appetite to listen to her call for nuance. 

The unavoidable truth is the pandemic hollowed out downtown San Francisco’s offices and led to an exodus of tech staffers who preferred remote work. It meant the loss of thousands of people who had reason to regularly stroll by Macy’s and so many other corporate retailers. Meanwhile, everybody else had even less reason to go shopping in an urban core. Why bother dressing up and schlepping downtown when you could get the same layaway deals online? 

Retail moves to the suburbs

Despite gloomy projections that “going shopping is dead,” retail has been recovering. But it should be no surprise that the recovery has happened largely in suburban markets, which have not experienced a mass exit of workers. Elsewhere, the reality is simple: Malls and department stores have been dying for the last decade, struggling to attract young people and redevelop growing vacant space into desirable uses. 

Although Macy’s is a legacy name, industry reports show it has been in a real doom loop of its own making. Everyone is angry about retail “shrinkage,” an industry term for losses in inventory due to external theft, employee theft and mismanagement. However, reporting by CNBC and others has demonstrated that while corporate retailers may be seeing a bump in retail shrink, it is a smaller factor than other operational missteps. Industry experts suggest that “shrink” can be an excuse for poor inventory management and staffing issues, and brands like Lowe’s, Foot Locker and Walgreens are now downplaying organized theft as a primary cause of revenue loss. The reality is that a swath of American retail chains have needed to downsize to remain profitable.

Did theft play a role in Macy’s closure? Of course, it did—having to deal with it requires precious resources. Yet, reactionary cries for police crackdowns on petty theft and homelessness miss how similar retail shutdowns are happening in cities with tougher crime laws and less visible poverty. Consider that Macy’s has already conducted layoffs and cut employee benefits to remain afloat, triggering a worker strike in 2022. Then there’s Macy’s faltering credit card revenue, which the company said accounted for nearly triple the revenue loss as retail shrink.

While The Standard has reported on Macy’s workers blaming theft for the closure, my own visit to Macy’s on Tuesday and conversations with longtime sales associates in multiple departments suggested that low staffing, an aging clientele and dips in seasonal shopping have greatly affected business. 

Given that Macy’s investors have already cooked up a $5.8 billion plan for a buyout, is it so hard to believe that Macy’s needs an exit plan, stat? Activist investors, private equity and real estate investment trusts have long salivated over the brand’s real estate portfolio, which some experts consider more valuable than the retail operation itself. And what could be more desirable than a massive, multilevel jewel of a storefront that has iconic value to a city?

Maybe it’s just that the Union Square flagship has little long-term brand value in 2024, 50 years since it first opened. If homelessness or street crime were the deciding factor for whether a department store lives or dies, we should have seen an improvement as soon as Breed launched a campaign to make police extremely present in Union Square. (Overall, there are signs that shoplifting incidents are declining in San Francisco.)  

But squeaky clean sidewalks can’t fix structural problems in commerce and human behavior—especially not when, as one longtime Macy’s associate told me, “there’s no other reason for middle-class people to shop” in Union Square, given the dominance of luxury boutiques. 

If anything, the doom-loop narrative is a self-fulfilling prophecy. It feels like downtown is in endless regression, and people crave a suspect. Predictably, ambitious politicians are taking advantage of the narrative, as with Dorsey and Board of Supervisors candidate Bilal Mahmood using the Macy’s closure to take swipes at their political opponents. Turns out, “scary people stealing things” is a boogeyman that feels more tangible than the obscure machinations of a faltering corporation. 

The story of 20th century capitalism is always punctuated by the rise and fall of goliaths. (Did Sears, Roebuck and Co. or JCPenney recede into memory due to shoplifters? Don’t think so.) We can mourn the loss of an iconic space, but we should also dream of something better than a department store increasingly devoid of life. 

Pretending that dream can happen merely with a wave of a carceral wand isn’t just a waste—it’s actively harmful to reviving downtown San Francisco, which needs more radical creativity than ever before. 

Eddie Kim is a journalist who lives in San Francisco's Castro District. He was previously a longtime features reporter for the critically acclaimed culture site Mel. His work can also be found at Slate, SFGate, Vice and beyond.

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