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Macy’s is facing calls from activist investors to make more changes at the department store.
Activist investors, Barrington Capital Group and Thor Equities, opposed Macy’s divestment plan in a statement Monday while at the same time arguing that the department store chain should consider other “structural actions” for its location and two luxury brands.
“We want to have additional shareholders in Macy’s who can bring new ideas to the Company, particularly in the areas of capital allocation, retail and real estate,” Barrington’s James Mitarotonda and Thor’s Joseph Sitt said in a press release.
(Bridget Bennett/Bloomberg via Getty Images/File)
Mitarotonda and Sitt said they “believe that Macy’s performance improvement, coupled with our aggressive share repurchase recommendations and business structural changes, could result in a 150% to 200% total return to Macy’s shareholders over the next three years.”
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Macy’s stock is down more than 18% in the past 12 months.
While the firms expressed optimism over Macy’s previously announced “Bold New Chapter” plan to close 150 underperforming Macy’s locations by the end of 2026, they said the department store chain should reduce its capital expenditures to 1.5% to 2%. of the total amount sold.
Macy’s “Bold New Chapter” plan includes investing in Macy’s stores, as well as opening more Bloomingdale’s and Bluemercury stores and streamlining.[ing] and modernity[ing] end performance.”
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| M | Company MACY’S INC. | 16.16 | +0.18 |
+1.16% |
One of the “structural steps” Barington and Thor suggested was to create a “separate real estate subsidiary to collect rent from the Macy’s retail market and pursue other sales and development opportunities,” Sitt said. Activist investors have estimated that the store chain’s assets are worth $5-9 billion.
In addition, Macy’s should look for “alternatives” for its Bloomingdale’s and Bluemercury brands, the firms said, pointing to “higher growth.”
MACY’S TO CLOSE 150 STORES BY 2026, OPEN NEW BLOOMINGDALE, BLUEMERCURY LOCATIONS
Macy’s operates approximately 60 Bloomingdale’s-branded locations and 164 Bluemercury-branded stores.
Another thing Barington and Thor say Macy’s should pursue is $2-3 billion in stock repurchases over the next three years.
The department store unit said Monday it is “committed to delivering sustainable, profitable growth and driving shareholder value” and has “consistently demonstrated an open mind, including regularly reviewing the Company’s strategy and capital allocation framework and exploring all avenues to enhance value.”
Macy’s added that its “Bold New Chapter” program “continues to gain strength from all three 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 look forward to working with our shareholders, including Barington and Thor, as we advance our efforts and achieve our long-term goals.”
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Barington and Thor want to be on Macy’s board, according to their press release.
Macy’s board currently has 13 members: Emilie Arel, Torrence Boone, Marie Chandoha, Naveen Chopra, Richard Clark, Deirdre Connelly, Jill Granoff, Sara Levinson, Richard Markee, Douglas Sesle, Tony Spring, Paul Varga and Tracey Zhen.
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