New stores open in midst of penny pinching

SAN FRANCISCO (KGO) -- The nation's largest department store chain is about to get a lot smaller. The iconic retailer Macy's announced it is cutting 7,000 jobs, which is four percent of its workforce. 1,400 of those lost positions will come from right here in the Bay Area.

Macy's says the move will save them about $400 million a year, but even in these tough economic times other retailers aren't cutting, they're still expanding.

CB2 and West Elm are the latest stores opening stores in the Bay Area and they seem to be optimistic despite the recession.

"It's a glass. But you can use it as a vase as well, isn't it amazing?" said Irina Sevian, a customer.

Sevian was downright giddy as she left the new CB2 in Berkeley. The retail chain, a division of Crate and Barrel, sells modern, yet relatively inexpensive designs.

"I love it. The prices are awesome and I just spent $130 and I bought a lot of stuff and gifts," said Sevian.

With the country deep in a recession, some may say CB2 couldn't have opened at a worse time. In just one year, dwindling sales have led to the loss of 19,000 retail jobs in the Bay Area. And just on Monday, Macy's announced it will eliminate 7,000 positions; 1,400 of them in the Bay Area.

"It's not as great as construction in the East Bay for example, but it is one of the industries that have been significantly hit by economic conditions nationwide," said Ruth Kavanagh, from the Employment Development Department.

However, Chicago-based CB2, hopes to weather the economic downturn by offering competitive prices. West Elm, a division of Williams Sonoma, is counting on that too. The San Francisco-based retailer opens its latest store in Emeryville on Wednesday. The company's spokesperson says, "We are uniquely positioned. We offer good designs at good prices."

Professor Eugene Muscat of USF's School of Management believes the two retailers may be on to something.

"I think right now, when you look at all these houses up for sale, you're going to see a lot of people that are moving into smaller homes or condominiums and when they do that, it creates a need for wares such as Crate and Barrel might be addressing," said Muscat.

Shoppers we talked to wonder how the new stores will fare. Lili Bordet checked out CB2 for the first time.

"It looks better than Ikea but is it really better? I don't know. It looks nice. I bought something. I bought a place mat," said Bordet.

As for Macy's, it will close 11 of its stores, but none in the Bay Area.

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