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Macy's may be closer to getting buyer for top half of State Street store

Macy's on Thursday hinted it's getting closer to finding a buyer for the top half of its State Street store.

The retailer confirmed in April it planned to sell the Chicago flagship's eighth through 14th floors, about 700,000 square feet of space.

"The marketing process is well under way for the upper floors of State Street in Chicago, and we hope to have an update by when we next report earnings," Macy's Chief Financial Officer Karen Hoguet said during a call with analysts Thursday.

Cincinnati-based Macy's has been talking about exploring ways to redevelop underused space at the Chicago store, along with three other flagships, since November 2015.

In February, Hoguet told analysts the State Street property could see a deal similar to a 2015 transaction in Seattle, in which Macy's sold a store's upper floors to a developer that is converting the space to offices. Downsizing would make State Street "a more vibrant, more productive store," she said.

Macy's has said it plans to continue operating out of the Chicago store's lower floors.

The talk of plans for the State Street store came as the retailer reported second-quarter financial results that Macy's president and CEO Jeff Gennette said were "in line with our expectations." Sales at Macy's stores open at least a year fell 2.8 percent, though the company said it was still on track to reach sales and earnings expectations for the year.

Executives also told analysts Macy's expects to generate more cash from selling assets, such as real estate, this year than it predicted in February. Macy's is still working on plans for its New York flagship, Hoguet said.

lzumbach@chicagotribune.com

Twitter @laurenzumbach

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