Henry Segerstrom poses with a sign announcing the construction of South Coast Plaza. (Courtesy of South Coast Plaza)

Eric Denker and his wife, Jalen Denker, of Irvine, shop at South Coast Plaza. It’s one of America’s most successful shopping complexes, and it’s celebrating its 50th anniversary this year. (Photo by Jeff Gritchen, Orange County Register/SCNG)

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Bristol Street in Costa Mesa circa 1974 near South Coast Plaza. (Courtesy Costa Mesa Historical Society)

Shoppers at Sears at South Coast Plaza. (File photo)

South Coast Plaza circa 1970-80s, with Sears in the foreground. (Courtesy of Orange County Archives)



The owners of the upscale mall in Costa Mesa confirmed Sunday, July 23, that they have acquired the store and land from Sears Holdings Corp., operators of the Sears and Kmart chains (Photo: Google)

The Segerstrom family has bought out the owners of the Sears store at South Coast Plaza.

The owners of the upscale mall in Costa Mesa confirmed Sunday, July 23, that they have acquired the store and land from Sears Holdings Corp., operators of the Sears and Kmart chains.

For now, Sears will still run the store but as a mall tenant.

“Sears will continue to operate the store and lease it from South Coast Plaza just as we do at a majority of our locations,” said a statement from Sears spokesman Howard Riefs. “We expect that this transaction will have no impact on our current day-to-day operations or on the overall shopping experience.”

The financially struggling Sears this year has been busy selling assets, closing stores, and laying off workers as traditional in-store retailing is hammered by changing consumer desires and online shipping.

This Sears, which opened on the mall’s first day 50 years ago, was sold for $187 million, according to the Orange County Business Journal, which first reported the sale.

Debra Gunn Downing, spokeswoman for South Coast Plaza, said, “Earlier this year, Sears Holdings announced its intention to sell certain real estate properties, including the South Coast Plaza location. In late June, a private transfer of the ownership of the property took place. South Coast Plaza now owns the parcel of land and the buildings and Sears will operate the retail location as a tenant of the shopping center.”

“South Coast Plaza and Sears have enjoyed a long and productive partnership for 50 years. We look forward to continuing that relationship with Sears and the many customers it serves through the South Coast Plaza location,” Downing said.

While mall officials would not comment on any plans for Sears properties, they are opening two restaurants next to Sears in the former Rainforest Cafe location: Tsujita Artisan Noodle and Barilla.

For decades, mall owners all-but gave away space to high-profile retailers as a way to lure shoppers who also shopped at rent-paying, smaller stores. Swiftly changing retail economics makes “anchor” stores relationships far less lucrative to mall operators in 2017.

Elsewhere in Orange County, Sears closed its store at the Laguna Hills Mall as part of that shopping center’s ongoing, near-total overhaul. The Irvine Co. tore down the Macy’s at Irvine Spectrum and is building a plaza of smaller stores to replace the old-line department store.

South Coast Plaza successfully evolved over the decades into a luxury shopping destination with roughly $2 billion in annual sales. Sears is a bad fit stylistically with other mall shops, especially as an anchor that owned its space and didn’t contribute much to the mall’s profitability.

Retail real estate expert Geoff Tranchina, executive vice president for the JLL real estate brokerage, wasn’t surprised at news of the sale of the Costa Mesa Sears.

“Sears is looking for cash and this is one of their premier assets left,” Tranchina said. “Long term, the idea is for mall owners and operators to look at alternative uses, smaller formats.”

The Segerstrom family could want more room to create extra rentable space to host more upper-crust shops and eateries — or to otherwise upgrade South Coast Plaza. And the family was apparently willing to pay a hefty price to get the Sears property back in the family fold.

In Hawaii, Sears sold its store back to the owners of a giant Honolulu mall five years ago for a reported $200 million. The store was closed and the site was rebuilt and expanded as a new shopping wing that includes Bloomingdale’s.

A half-century ago, the Segerstroms opened South Coast Plaza on what was previously lima bean fields near the soon-to-be-competed 405 freeway. Sears was one of the 70-plus stores that greeted shoppers that day.

The family owns just one mall, South Coast Plaza. The center’s global shopping clout got the Segerstroms recently ranked 19th on a list of most valuable mall operators in America — with $3 billion in value — by Green Street Advisors of Newport Beach.

Story updated with Sears comment.