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Macy’s is facing calls to make a number of changes from a pair of activist investors department store chain,
active investorsBarrington Capital Group and Thor Equities raised the issue of Macy’s capital allocation strategy in Monday’s presentation, as well as arguing that the department store chain should consider some “structural actions” to its real estate and two more luxury brands. .
“We want to be a value-adding stockholder in Macy’s who can bring new perspectives to the company, particularly in the areas of capital allocation, sales and retail and real estate,” Barrington’s James Miterotonda and Thor’s Joseph Sitt said in a press release.
(Bridget Bennett/Bloomberg via Getty Images/File)
mitrotonda and sit He said, “They believe that Macy’s, combined with our recommendations for operational improvements, aggressive share repurchases and structural changes to the business, can result in a 150% to 200% total return for Macy’s shareholders over the next three years.” “
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Macy’s share price is down more than 18% in the last 12 months.
While the firms expressed optimism about Macy’s previously announced “Bold New Chapter” initiative to close 150 unproductive Macy’s locations by the end of the year 2026, they argued that the department store chain needs to reduce its capital expenditures to its total. Should be reduced by 1.5% to 2% of sales.
The “Bold New Chapter” initiative launched by Macy’s also includes investing in Macy’s locations that it will retain, as well as opening more Bloomingdale’s and Bluemercury stores and “simplify(ing) end-to-end operations and “Includes modernizing(ing).”
| anchor | Security | Last | Change | Change % |
|---|---|---|---|---|
| m | Macy’s Inc. | 16.16 | +0.18 |
+1.16% |
One of the “structuring actions” suggested by Barrington and Thor was “creating a separate real estate subsidiary to collect market rents from Macy’s retail operations and pursue other asset sales and redevelopment opportunities,” Sitt said. Activist investors estimate the value of the department store chain’s real estate assets at $5-$9 billion.
Additionally, Macy’s should look at “strategic alternatives” for its Bloomingdale’s and Bluemercury brands, the companies said, pointing to their “high growth.”
Macy’s to close 150 stores by 2026, open new Bloomingdale’s, BlueMercury locations
Macy’s operates Approximately 60 Bloomingdale’s-branded locations and 164 Bluemercury-branded stores.
Another thing Barrington and Thor said is that Macy’s should repurchase $2-$3 billion of stock over the next three years.
The department store chain said on Monday it is “committed to sustainable, profitable growth and enhancing shareholder value” and “has consistently demonstrated an open mind, including regularly reviewing the company’s strategy and capital allocation framework and exploring all avenues of growth.” Involves exploring.” price.”
Macy’s said its “Bold New Chapter” initiative is “gaining popularity across all three of its pillars.”
(Gary Hershorn/Getty Images/File)
“We will continue to act in the best interests of the Company and all Macy’s Inc. shareholders and we look forward to connecting with our shareholders, including Barrington and Thor, as we advance our initiatives and execute toward our long-term goals. Are doing.”
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According to their press release, Barrington and Thor are seeking a presence on Macy’s board.
Macy’s board currently has 13 members: Emily Arel, Torrance Boone, Mary Chandoha, Naveen Chopra, Richard Clarke, Deirdre Connelly, Jill Granoff, Sarah Levinson, Richard Markey, Douglas Sesley, Tony Spring, Paul Varga and Tracy Jane.
