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Executive Summary:
Activist investors Barington Capital Group and Thor Equities have called on Macy’s Inc. to consider strategic changes, including evaluating alternatives for its Bloomingdale’s and Bluemercury banners, to enhance shareholder value. The investors propose reducing capital expenditures, repurchasing $2 billion in shares over three years, forming a real estate subsidiary, and adding their representatives to Macy’s board.
Citing rival Dillard’s as a model, the investors highlighted Dillard’s superior shareholder returns and strategic focus on expense management and capital allocation. However, analysts argue that the proposed measures, such as cutting expenditures, conflict with Macy’s ongoing turnaround efforts under its “Bold New Chapter” strategy, which requires reinvestment in stores and operations.
Macy’s has resisted similar investor pressure earlier this year, including rejecting a $7 billion buyout offer. While the company acknowledges the value of its real estate holdings, experts warn that over-leveraging these assets could weaken its financial position. With Bloomingdale’s and Bluemercury outperforming other divisions, decisions regarding their future will play a critical role in shaping Macy’s trajectory.
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