Activist Barrington targets Macy’s for spending, real estate fix | Wilnesh News

Activist investor Barington Capital revealed on Monday that it macy’s department store It wants the company to cut expenses, explore selling its luxury brands and take a hard look at its real estate portfolio.

It’s the fourth push by activists against the struggling department store in the past decade.

After the news broke, Macy’s shares rose about 3% in pre-market trading. According to Barrington, the activist has partnered with private equity firm Thor Equities to promote the initiative. The two investors did not disclose the size of their holdings.

The activist said he believed Macy’s could cut inventory, sales and administrative costs, according to slides shared by the company. Barrington said in his speech that while the business continued to generate cash, management chose to spend nearly $10 billion on capital expenditures and ignored buybacks or dividends.

Macy’s stock has underperformed the S&P 500 and Retail Select Index over the past decade. Barrington points to smaller department store operators Dillard’swhich also criticized management as an example of efficient capital allocation. Dillard’s has a market capitalization of more than $7 billion and says it operates 273 stores in the United States

In a statement Monday, Macy’s stood by its plan to close its troubled namesake stores and invest in stronger parts of its business.

“We remain confident in our bold new chapter strategy,” Macy’s said in a statement. “We look forward to working with our shareholders, including Barrington and Tolle.”

The department store operator announced in February that it would close about 150, or nearly a third, of its namesake stores by early 2027. chain stores, upscale department store Bloomingdale’s stores and beauty retailer Bluemercury.

Barrington wants Macy’s to step up share buybacks and consider selling its Bluemercury and Bloomingdale’s brands.

Like other activists before him, Barrington believes Macy’s should revisit its real estate portfolio. Barrington valued it at between $5 billion and $9 billion, echoing analysis from other activist investors. Barrington said Macy’s should create a separate subsidiary that could collect rent from Macy’s parent company while the subsidiary’s management evaluates how to maximize value from the assets.

Macy’s is once again being targeted by activists as sales at its namesake stores decline and many mall anchor stores continue to close.

Macy’s said sales fell 2.4% to $4.74 billion in the most recent quarter ended Nov. 2. Comparable sales across its owned and licensed businesses and online markets fell 1.3%.

Macy’s delayed reporting full results for the quarter as it faces scrutiny for another reason. The company said it was launching an investigation after discovering that an employee deliberately concealed as much as $154 million in delivery charges from its accounting books for nearly three years. The company said it plans to share full results and outlook by Dec. 11.

Selling real estate while Macy’s stores close could free up cash for the business. Macy’s, which owns many mall anchor stores, has not disclosed which locations it has sold. In late November, the company said proceeds from asset sales in the latest quarter totaled $66 million, above its expectations.

In recent quarters, Macy’s has begun reporting sales at stores that will remain open after the latest round of closures of namesake locations. This has eliminated some struggling mall stores. Macy’s, which will remain open after the beginning of 2027, saw comparable sales (including third-party markets) of its own and licensed stores decline 0.9%.

Barrington has worked on campaigns for other large consumer brands, including toymaker Mattel, The Children’s Place, Hanes and Steve Madden. Thor Equities, a retail-focused private equity firm, was part of the buyout group that acquired Hurley a few years ago.

Correction: A previous version of this article incorrectly named the private equity firm Barington Capital works with. This is Thor stock.