Another activist investor is urging Macyâs Inc. to take drastic steps to boost its stock price.
Barington Capital Group is calling on Macyâs to cut its capital expenditures, form a separate real estate group and consider strategic alternatives for the Bloomingdaleâs and Bluemercury chains in order to drive share gains, according to a presentation that was published on its website.
While Barington sees âearly promiseâ in the chainâs plan to shut underperforming stores, the activist investors want additional cost reductions âfor a healthier store base that can begin to deliver consistent revenue growth and profit improvements,â the group, which includes Thor Equities LLC, wrote in a statement.
Through Friday, Macyâs shares had fallen nearly 15 percent since the department store retailer announced its turnaround plan in February. The stock climbed 3.9 percent on Monday.
Barington didnât disclose the size of its stake.
Macyâs said in a statement that its board and management remain confident in its strategy, which âcontinues to gain traction.â The department store chain looks âforward to engagingâ with the investors.
The retailer has been challenged by the shift to e-commerce, which has pulled shoppers away from malls and physical department stores. It aims to close 150 Macyâs locations through 2026, while expanding its higher end Bloomingdaleâs and Bluemercury stores, among other steps.
The company also disclosed in November that it is investigating a plot in which a worker hid millions in expenses. The discovery led Macyâs to delay reporting its quarterly earnings, which the company says it will announce by Dec. 11.
In its presentation, Barington said Macyâs should form a real estate subsidiary, which would include all of the companyâs owned and leased properties, including its stores and distribution centers. The retailer would then pay rent to the subsidiary.
The group said it estimates that Macyâs real estate, including its flagship property at Herald Square in Manhattan, is worth between $5 billion and $9 billion.
Barington is urging Macyâs to cut its spending to between 1.5 percent and 2 percent of sales, down from 4 percent currently, and buy back as much as $3 billion in stock over the next three years.
Macyâs and its new chief executive officer, Tony Spring, faced an activist challenge earlier this year. Macyâs ended talks with Arkhouse Management Co. and Brigade Capital Management in July and pledged to execute its own turnaround plan.
By Gowri Gurumurthy and Will Kubzansky.
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