💼 Investors push for changes
Barington Capital and Thor Equities have urged Macy’s to explore asset sales to unlock value for shareholders. They estimate Macy's real estate, including its iconic Herald Square store, could be worth $5–$9B. These recommendations follow Macy's rejection of a 2024 takeover attempt and coincide with upcoming earnings. Macy’s stated it remains committed to sustainable growth but hasn't commented on the proposals directly.
📉 Risks of selling real estate
Analysts caution against selling all real estate. Ryan Dossey of SoldFast noted past failures like Red Lobster, which went bankrupt after asset stripping. High rents could hurt Macy's long-term health if properties are leased back at inflated rates. Experts suggest offloading underperforming store properties instead. Still, the potential cash influx from sales could help Macy's tackle debt and invest in online growth.
🏬 The Bloomingdale's dilemma
Investors also suggested evaluating Macy’s retail brands, including Bloomingdale’s and Bluemercury. Analyst Evan Mann noted Bloomingdale’s weaker appeal compared to Macy’s and questioned its marketability. However, Bluemercury’s younger audience could attract buyers or be a strategic asset. Decisions here may hinge on how much capital Macy's needs to address debt and future plans.
🛒 Digital growth: Macy’s key to success
Macy’s must enhance its digital strategy to thrive. Despite $7.3B in projected online sales for 2024, experts believe the retailer lags behind competitors. Bluemercury's appeal to younger shoppers offers a digital opportunity. Meanwhile, the company's turnaround plan is in place, but execution over the next two years will be critical to winning back investors and customers alike.
Should Macy's sell its real estate to unlock value?
