Macy's, Inc. released a statement on Monday in response to Barington Capital Group, L.P.'s recent recommendations for altering its capital allocation strategy. Barington's presentation, in collaboration with Thor Equities LLC and their affiliates, suggested various structural changes aimed at enhancing shareholder value.
The presentation highlighted that Macy's shares have experienced a decline over the last decade, which they attributed to persistent challenges in the department store sector and previous management decisions. Barington and Thor expressed concern regarding the potential future misallocation of Macy's cash, cautioning against ineffective capital expenditure programs. They argued that Macy's board may currently lack the expertise and ambition to fully capitalize on the company's real estate assets.
Their proposals included reducing capital expenditures to 1.5%–2% of total sales and initiating a stock buyback of at least $2–$3 billion over the next three years. Additionally, they suggested forming a separate internal real estate subsidiary and exploring strategic options for Bloomingdale's and Bluemercury, which are positioned for higher growth in the luxury sector.
Macy's, headquartered in New York City, assured stakeholders of its dedication to sustainable and profitable growth with the ultimate aim of enhancing shareholder value. The company emphasized its new strategic initiative, "A Bold New Chapter," which includes closing underperforming stores and cutting costs. Macy's expects this plan to support steady revenue growth and improved profitability.
As of now, Macy's shares are trading at $16.83 on the New York Stock Exchange, reflecting a 2.46% increase.
