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Arts groups, charities fear effects of losing Kaufmann's
Tuesday, March 01, 2005

The Pittsburgh Ballet Theatre is afraid of what cultural life would be like without Kaufmann's, the lead corporate sponsor for the group's $2 million holiday production of "The Nutcracker."

The sudden uncertainty of the venerable department-store name following its acquisition by Federated Department Stores Inc. "is definitely a concern," said Gail Murphy, director of marketing for the Pittsburgh Ballet Theatre, "and should be a concern of all the arts groups."

The many local businesses, charities and nonprofits depending heavily on Kaufmann's for support no doubt have the similar fears.

Some reached yesterday were worried that the new corporate parent may not continue the many Pittsburgh traditions connected to the Kaufmann's name.

Around Christmas, for example, an annual rite for many Pittsburgh families is to take in a Kaufmann's-sponsored holiday parade, check out the window displays at Kaufmann's flagship store on Smithfield Street and take in a performance of "The Nutcracker," where the character of Marie reads from "Kaufmann's Christmas Stories for Boys and Girls," a storybook sold by the department store chain in the early 1900s.

"Kaufmann's has been a tremendous supporter of the arts in Pittsburgh and the Pittsburgh Ballet has certainly benefited from their largesse," said Murphy, the group's marketing director.

Edgar Kaufmann, who led the store through the first half of the last century, was a big proponent of artistic expression, having founded the Civic Light Opera in 1946 and helping build the Civic Arena -- now called Mellon Arena -- to house the musical theater group.

Kaufmann's still is the sole corporate sponsor of CLO Mini Stars, a troupe of young performers, and it puts on a fall fashion show each year to raise money for the CLO Academy, a school where students are trained in voice, acting, dance and musical theater.

"Their support has been long and broad," CLO spokeswoman Kristin Archbold said, adding: "We feel it is a little too early to speculate about the impact this will have on our particular program."

Kaufmann's and its parent, St. Louis-based May Department Stores Co., also are big sponsors of Oasis, a nonprofit group that provides classes and guidance to people over the age of 50. The organization's Pittsburgh office is on the 10th floor of the Downtown department store, where it has been for the last 18 years.

If local director Gail Weisberg has any doubts about Federated's commitment to the same program, she was not willing to say so yesterday. "We are still hoping Oasis continues and there is no reason for us to think it won't at this point," she said.

Suburban mall managers tried to play the wait-and-see game yesterday as well, saying it is too early to know if Federated will close stores where the combined company has a Lazarus-Macy's and a Kaufmann's -- a situation that exists at Monroeville Mall, South Hills Village and Ross Park Mall.

Landlords depend on Kaufmann's to bring in customers and supply smaller stores with foot traffic. Although a Kaufmann's acquisition has been rumored for weeks, a spokeswoman at Monroeville Mall said: "It is all so new. We don't have any information or light we can shed."

Others waiting to see how everything shakes out are the owners of local newspapers, who rely on department stores for large chunks of advertising.

"It is certainly a concern," said Pittsburgh Tribune-Review President Ed Harrell. "It is just so hard to tell right now what it will do."

Kaufmann's is the No. 1 advertiser in both the Tribune-Review and the Pittsburgh Post-Gazette. Lazarus-Macy's is No. 2 at the Post-Gazette. Asked about the impact, Post-Gazette President David Beihoff said, "It is too early to tell right now.... Many variables could happen."

Department stores have been scaling back print advertising in recent years and putting more ad dollars into local TV.

The ad director at a local television station, requesting anonymity, said Federated could either cut back its advertising dramatically or ramp it up to build a new brand name in Pittsburgh, especially if it ditches the Kaufmann's name. "It's too early to have a sense," he said.

Some find it hard to believe that Kaufmann's name could ever go away, especially Downtown.

In that group is Angelo Parente, owner of a Sbarro restaurant across the street from the Downtown Kaufmann's, on Smithfield. "We will keep our fingers crossed," said Parente, who relies on Kaufmann's customers and employees for 25 percent to 30 percent of his business.

Elsewhere Downtown yesterday, there was measured optimism that the Federated purchase would not disrupt the long-delayed efforts to redevelop the retail district along Fifth and Forbes avenues.

Former Urban Redevelopment Authority Director Mulu Birru said he considered Downtown to still be "a very strong market" despite the recent exodus of Lazarus-Macy's and Lord and Taylor.

Craig Kwiecinski, spokesman for Mayor Tom Murphy, said Kaufmann's "has been a strong retail anchor in Downtown and the city is interested in working with whoever the parent company is to ensure Kaufmann's viability in Downtown."

Herb Burger, who heads a private task force putting together a plan to revitalize the Fifth and Forbes avenues retail corridor, does not think the merger will have any effect on his effort or on overall development Downtown.

Burger, like others, also said he expects the Kaufmann's flagship store Downtown to remain open, possibly with a name change. He said the store is too successful and too profitable to close. "It's a marketing keystone, not only for the city, but for the area."

Burger hopes to announce a new plan for the Fifth and Forbes corridor soon, one which could include possible reuses for the vacant Lazarus-Macy's building a block from the Downtown Kaufmann's.

He believes Federated will continue to pursue a sale of its vacant department store, regardless of its merger with May, even if the purchaser could end up competing with Federated Downtown. "Could that have some retail in it? Certainly. It could have a lot of things in it," he said.

George Ruby, a real estate broker who has been representing a New York developer in his bid to buy the Lazarus-Macy's store, said last month that the Regional Industrial Development Corp. of Southwestern Pennsylvania is close to purchasing the building. RIDC President Robert Stephenson has not returned phone calls seeking comment.

The newest Fifth and Forbes plan is expected to be built around residential housing, with retail serving more of a complementary role.

First published on March 1, 2005 at 12:00 am
Staff writer Mark Belko contributed to this story. Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.