Macy’s Stock Rises as Activist Investors Call for Real Estate Unit | Global News Avenue

Macy’s Department Store (medium sizeShares of the company rose more than 2% in intraday trading on Monday after activist investors released a proposal to turn around the retailer, including creating a real estate subsidiary and curbing capital spending.

Activist investment firm Barington Capital Group and real estate investment firm Thor Equities collaborated on the proposal, which would provide Chief Executive Officer (CEO) Tony Spring’s Plan Closing many of the worst-performing Macy’s stores. They urged the company to create a real estate unit to conduct property sales and redevelopment and collect rent from Macy’s.

“Macy’s has a portfolio of valuable and well-located real estate assets valued at $5 to $9 billion, led by its flagship property in New York City’s Herald Square, which we believe Valued between $5 and $9 billion.”

Activists call for buybacks, possible spin-off of Bloomingdale’s and Bluemercury

Activists also called for reducing capital spending to 1.5%-2% of sales from current levels of about 4%; “buying back at least $2-3 billion in stock over the next three years”; and potentially spinning off Macy’s Growth Higher luxury brands Bloomingdale’s and Bluemercury. The group is also seeking a seat on Macy’s board of directors and claims its plan could boost returns by 150% to 200% over the next three years.

Macy’s leadership issued a statement expressing confidence in its plans and a commitment to engaging with Barrington, Tolle and other shareholders.

“The Macy’s board of directors and management team are committed to achieving sustainable profitable growth and driving shareholder value,” the company said.

Barrington and Tolle said Macy’s shares are down more than 16% this year, but have lost significant value over the past decade as the department store struggled and the company embarked on ambitious capital projects. Macy’s attracted the attention of other activist investors, including Arkhouse Management and Brigade Capital Management, but neither was successful Tried to buy earlier this year.