What impact will it have and what will fill the void?
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There are some clear winners and losers.
RELATED: Iconic SF Union Square Macy's to close amid mass shuttering of locations, supervisor says
Richard Espinoza, 84, has been running Richards Hair Design in Union Square at Sutter and Grant for more than four decades.
Nowadays, his shop is pretty quiet.
"This is a picture of the shop when we were busy," said Espinoza. "This was about 40 years. We were going strong then. We had six, seven, eight people working here at the time."
Small businesses in union square count on foot traffic. Espinoza says the closure of Macy's Union Square will be tough.
"It's going to hurt everybody. I know more is going to close," said Espinoza.
Macy's at Union Square has been a central part of Bay Area retail for more than a century - it is also home to many memories.
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"It's iconic to Union Square. So it's really sad," said Lara Anderson. "Because this is where we would go shopping at Christmas time and see the window."
So what does the future hold for Union Square?
Kazuko Morgan is with Cushman and Wakefield.
"While any departure is a loss, the ability to do something new and forward thinking is welcome and exciting," said Morgan.
MORE: Macy's to close 150 stores as sales slip as it pivots to luxury at Bloomingdale's and Blue Mercury
Union Square is seeing a number of new mixed retail ventures.
"The building right next to Macy's, the old I. Magnin building, will become - it's still under construction but the bottom floor will remain retail. The middle level will be office space. And the top level will be housing," said Mayor London Breed.
In Union Square, new establishments are generating a lot of excitement.
"That includes Chotto Matte at the rooftop right there which has been fantastic for Union Square, for San Francisco. It's brought a lot of glamour, it's brought a lot of people," said Morgan.
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What's happening in Union Square is happening elsewhere - stores that do big business online don't need big stores anymore. Many are shifting to smaller footprints. And many luxury brands that traditionally had small stores are thriving and expanding.
"In the last two months, we have signed three long term leases in Union Square. We are working on a number of other leases. Those locations were all smaller footprint -- all under 10,000 square feet," said Alex Sagues, CBRE retail development expert.
MORE: These are the businesses thriving in SF's Union Square
And while there are still a lot of questions about what will take the place of Macy's Union Square.
"I don't think there is a clear answer. I think that ground floor space is very desirable and there is high demand for that ground floor space," said Sagues.
Retail development and real estate experts say there may be a lot of empty storefronts in Union Square.
But, there are also a number of new leases that have been signed.
Union Square is still a popular tourist destination.
It is at least one sign Union Square may be on the verge or redefining shopping for the next generation.