By Jim Kirk and Sandra Jones
Chicago Tribune staff reporters
The historic Carson Pirie Scott store at 1 S. State St. in downtown Chicago will close its doors in March, the retailer said today.
Carson's new owner, Bon-Ton Stores Inc., blamed negative sales trends and rising operating costs. The company also said that incentive payments from the owner of the building, Joseph Freed & Associates, played a role in the company's decision.
Freed, which has restored the landmark building's exterior and reactivated 400,000 square feet of upper-floor space for office use, has other plans for the site, the retailer said.
At least 450 employees, including 300 full timers, will be put out of work as a result of the store closing. Bon-Ton said the full-time employees can interview for positions at other stores.
Bon Ton said that even after millions of dollars were spent fixing the store, the retailer continued to see poor sales and net operating losses from rising operating costs.
The York, Pa.-based department store operator acquired Carson's earlier this year as part of its $1.05 billion purchase of the northern department store division of Saks Inc.
"When we bought the company in March, it wasn't in our plans to do this, but it is the only Carson's store that is losing money. Sales have been dropping quite a bit," said Bud Bergren, Bon-Ton's president and chief executive officer. "It's not in the best shape."
Operating costs at the State Street store are significantly higher than at other stores, Bergren said.
"The Carson's store has been a fixture at State and Madison for over 100 years and we'll be sorry to see it close," Mayor Richard Daley said today in a prepared statement.
"But shopping habits have changed over the years, and downtown Chicago will adapt to this as it has to so many other changes in the business environment," he said.
Carson's occupies 600,000 square feet of the 1 million-square-foot State Street building.
Freed plans to convert 250,000 square feet on the first two floors into retail space and the remaining 350,000 square feet most likely into office space, said Paul Fitzpatrick, managing director in charge of the project at Freed.
In his statement, Daley said he expects the space to be leased in the "very near future."
"There is already considerable interest in using it for retail shops, entertainment and offices," he said. "This is a well-maintained landmark building at an ideal location in the heart of the Loop."
Carson's opened in 1904 at the corner of State and Madison Streets, once dubbed the busiest intersection in the world. But it has not been busy enough of late for some retailers.
Though State Street has seen a huge redevelopment surge of late, the famous corridor has lost luster as customers were lured away to sprawling suburban malls.
At one time, Chicago shoppers had six, huge, full-service department stores to choose from on the street. Now, there are only two: Marshall Field's, soon to become Macy's, and Sears, Roebuck and Co., which came back to State Street a few years ago.
Bon-Ton said that even after investing millions of dollars on an annual basis for repairs and improvements, its Carson's store on State experienced sales declines versus the overall Carson's sales increase in 2004 and 2005.
The retailer's owner said it has no plans to close any of its other 25 Carson's department stores or five furniture stores in the Chicago area. It is also looking at new sites for Carson's on the Near North and Near South Sides of the city.
Carson's shopper Arelis Montor, 25, a human resources manager at the Palmer House Hilton, was shocked to hear the news.
"It's closing? Really? Wow," said Montor, who lives in Chicago. "Why would they close it? Oh my God."
Confessing to being a "purse fanatic," Montor tries to avoid coming to the shop on payday.
Chicago Tribune staff reporters
The historic Carson Pirie Scott store at 1 S. State St. in downtown Chicago will close its doors in March, the retailer said today.
Carson's new owner, Bon-Ton Stores Inc., blamed negative sales trends and rising operating costs. The company also said that incentive payments from the owner of the building, Joseph Freed & Associates, played a role in the company's decision.
Freed, which has restored the landmark building's exterior and reactivated 400,000 square feet of upper-floor space for office use, has other plans for the site, the retailer said.
At least 450 employees, including 300 full timers, will be put out of work as a result of the store closing. Bon-Ton said the full-time employees can interview for positions at other stores.
Bon Ton said that even after millions of dollars were spent fixing the store, the retailer continued to see poor sales and net operating losses from rising operating costs.
The York, Pa.-based department store operator acquired Carson's earlier this year as part of its $1.05 billion purchase of the northern department store division of Saks Inc.
"When we bought the company in March, it wasn't in our plans to do this, but it is the only Carson's store that is losing money. Sales have been dropping quite a bit," said Bud Bergren, Bon-Ton's president and chief executive officer. "It's not in the best shape."
Operating costs at the State Street store are significantly higher than at other stores, Bergren said.
"The Carson's store has been a fixture at State and Madison for over 100 years and we'll be sorry to see it close," Mayor Richard Daley said today in a prepared statement.
"But shopping habits have changed over the years, and downtown Chicago will adapt to this as it has to so many other changes in the business environment," he said.
Carson's occupies 600,000 square feet of the 1 million-square-foot State Street building.
Freed plans to convert 250,000 square feet on the first two floors into retail space and the remaining 350,000 square feet most likely into office space, said Paul Fitzpatrick, managing director in charge of the project at Freed.
In his statement, Daley said he expects the space to be leased in the "very near future."
"There is already considerable interest in using it for retail shops, entertainment and offices," he said. "This is a well-maintained landmark building at an ideal location in the heart of the Loop."
Carson's opened in 1904 at the corner of State and Madison Streets, once dubbed the busiest intersection in the world. But it has not been busy enough of late for some retailers.
Though State Street has seen a huge redevelopment surge of late, the famous corridor has lost luster as customers were lured away to sprawling suburban malls.
At one time, Chicago shoppers had six, huge, full-service department stores to choose from on the street. Now, there are only two: Marshall Field's, soon to become Macy's, and Sears, Roebuck and Co., which came back to State Street a few years ago.
Bon-Ton said that even after investing millions of dollars on an annual basis for repairs and improvements, its Carson's store on State experienced sales declines versus the overall Carson's sales increase in 2004 and 2005.
The retailer's owner said it has no plans to close any of its other 25 Carson's department stores or five furniture stores in the Chicago area. It is also looking at new sites for Carson's on the Near North and Near South Sides of the city.
Carson's shopper Arelis Montor, 25, a human resources manager at the Palmer House Hilton, was shocked to hear the news.
"It's closing? Really? Wow," said Montor, who lives in Chicago. "Why would they close it? Oh my God."
Confessing to being a "purse fanatic," Montor tries to avoid coming to the shop on payday.
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