So why not just market the line as "Conservative," or "Modest?" Considering that fundamental Christianity, Mormon, Mennonite, Hasidim, etc. encourage and/or require modest dress for women followers it seems that, leaving hijab out of the mix, this apparel line could appeal to a larger audience. Just don't label it. Google "Modest Apparel" and you will find dozens of sites with fashionable clothing selling to anyone without judgment on the wearer.
Interesting, I live near that closed Macy's location and started my retail career at the former Lazarus store. In the past 20 years, as the location has moved from Lazarus to Kaufman's to Macy's, the surrounding retail area has been declining. Most of the strong, national retailers have relocated to newer malls in more affluent neighborhoods leaving a sad expanse of failed businesses and seedy strip malls surrounding the store. While that is a great use of an empty space it may not bring in the desired clientele to a rather sketchy environment. So the retailer would have to work with the mall and other stores to bring the area back to life as a safe place to shop.