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Some things just go together. Milk and cookies. Fire and ice. Macy’s and activist investors.
Activist investor Barington Capital has secured a position at Macy’s, the struggling department store chain, and wants the company to cut spending and analyze its real estate portfolio, the Wall Street Journal reported Monday. Barington’s new position was revealed to Macy’s shareholders in a PowerPoint presentation.
That’s the fourth activist push at Macy’s in the last 10 years, according to CNBC.
Barington, together with real-estate investment firm Thor Equities, said in a press release that the Macy’s board “lacks the knowledge, vision, and desire to extract maximum value from its real estate assets,” which the two groups estimate to be between $5 billion and $9 billion.
In addition to a proposal that the retailer create a real-estate subsidiary, the groups are also urging Macy’s to cut its capital expenditures to between 1.5% and 2% of its total sales (from 4% at present), as well as repurchase at least $2 billion to $3 billion in stock in the next three years. The groups also want Barington and Thor representatives added to Macy’s board.
According to the Barington and Thor presentation, these changes, among others, could amount to a boost of somewhere between 150% to 200% for Macy’s stockholders in the next three years.
In response, Macy’s said it “remain[s] confident” in its current business model while welcoming the activist input.
“We will continue to act in the best interests of the Company and all Macy’s, Inc. shareholders and we look forward to engaging with our shareholders, including Barington and Thor, as we further advance our initiatives and execute toward our long-term goals,” the company said.
Again, Macy’s is no stranger to activist intervention. Earlier this year, Macy’s ended its proxy fight with another activist investor, Arkhouse Management, and agreed to add two Arkhouse-nominated directors to its board.