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NORDSTROM HELPS END TAUBMAN, MAY SPAT

BY SASCHA BRODSKY

May Department Stores Co. sold its Lord & Taylor anchor store at Cherry Creek Mall, Denver, to Taubman Centers, which is bringing in a Nordstrom.

This ended months of legal wrangling between Taubman and May. Last fall May sued Taubman for the right to replace the Lord & Taylor with a Foley’s Men’s and Home. Taubman had wanted a higher-end concept for the space.

Each firm appealed to the reciprocal easement agreement to back its position. The agreement said any replacement space must “contain a number of departments for the sale of varied merchandise and services [that are] operated as a single, integrated unit.” May insisted that this definition cleared the way for the Men’s and Home store. Taubman countered that the Foley’s concept would not operate at the level committed to by a Lord & Taylor, thus compromising the mall’s dominance as a regional fashion center. (Increasingly, landlords and retailers are examining such reciprocal easement agreements to determine their power to refill empty anchor spaces.)

May and Taubman came to a settlement but declined to discuss the terms with SCT. May, which Federated Department Stores agreed to buy for $17 billion in February, says it sold the anchor back to Taubman. Analysts say the deal may include priority placement for May at one of Taubman’s other malls.

“Having Nordstrom agree to come into that space was probably the reason the suit was dropped,” said Janet Pearlstein, an attorney at Lottner Rubin Fishman Brown & Saul, in Denver. (Lottner Rubin was not involved in the suit.)

The 120,000-square-foot, two-level Nordstrom, which is tentatively scheduled to open in the fall of next year, will be the retailer’s third full-line store in Colorado. The unit will retain the basic Lord & Taylor structure but with a redone facade and interior. Cherry Creek’s other upscale stores include Saks Fifth Avenue and Neiman Marcus.

The Lord & Taylor unit is one of 32 Lord & Taylors that May says it plans to close or sell. Two other Denver-area malls containing Lord & Taylor stores — Park Meadows Town Center, in Littleton, and FlatIron Crossing, Broomfield — have bought space from May.

“We couldn’t be happier with the reception we have received from customers here since we opened our first Denver-area store at Park Meadows in 1996, and this provides us the opportunity to more conveniently serve customers in the Cherry Creek area,” said Erik Nordstrom, the chain’s executive vice president of full-line stores, in a written statement. “Adding in the high number of out-of-town visitors to this area, we simply believe that Cherry Creek shopping center is the perfect spot to expand our presence in and around Denver.”