PITTSBURGH Does closing loom for Lazarus-Macy's as its sales slump?

The retailer will keep a close watch on the store's Christmas sales numbers.
PITTSBURGH (AP) -- The Lazarus-Macy's store in the city's downtown, which has had disappointing sales since it opened nearly five years ago, could close as early as this winter if the department store chain decides sales are "insufficient to reasonably operate," a lease said.
On the five-year anniversary of a lease that Lazarus-Macy's parent company, Federated Department Stores Co., signed with Pittsburgh's Urban Redevelopment Authority, the chain will be allowed to close part of the store with 90 days' notice or all of the store with 120 days' notice.
The anniversary is quickly approaching -- Nov. 6 -- and the Fifth Avenue store hasn't been performing well.
In the first four years, the store's sales have never passed $21.7 million, and it brought in $16.2 million last year.
"As we've stated in the past, we have been disappointed with the sales, but we are focusing now on the Lazarus-Macy's brand integration. We are hopeful that bringing the 'best of both worlds' to Pittsburgh will result in a positive impact on business in the downtown store during the important fourth-quarter holiday season," Lazarus-Macy's spokeswoman Jean Coggan said in a statement.
1995 agreement
Federated agreed to build a new store in Pittsburgh's downtown in 1995, signing a 20-year lease and agreeing to spend at least $21 million on construction.
In exchange, Federated received an $18 million Pittsburgh Development Fund loan, $9.4 million in tax-increment financing and $5.9 million in municipal services money. The project also received $16.8 million from the redevelopment authority.
The lease allows Federated to close part of the building and use it for other purposes; close the entire store and use the building in another way; or sell the building to the Pittsburgh Development Fund for $20 million. If Lazarus-Macy's holds on to the store, it would be responsible for all outstanding loans.
Lazarus-Macy's still owes the Pittsburgh Development Fund $12.7 million, but is obligated to make payments only if sales reach a certain threshold.
Fifth-Forbes corridor
When the store first opened in 1998, Pittsburgh officials had hoped to redevelop the city's Fifth and Forbes retail corridor.
Mayor Tom Murphy's first plan for the corridor, developed with Chicago-based Urban Retail Properties, fizzled in the fall of 2000.
The mayor's second plan, developed with Kravco Co., has not been fully revealed.
In July, Lord & amp; Taylor's parent company, May Department Stores Co., announced that it planned to sell its downtown Pittsburgh store and 31 others around the nation as part of a $380 million restructuring.
The building should be closed this fall.
Although Mulugetta Birru, the director of the redevelopment authority, said Lazarus-Macy's has not indicated it would close, retail experts said the signs don't look good.
"I would be surprised, given the sales volume of Lazarus in this location, if they would remain in that location beyond their five-year operating covenant," said Herky Pollock, a retail broker with CB Richard Ellis/Pittsburgh.