The news: Macy’s is facing yet another push from an activist investor, its second this year, as its weakening influence on the retail landscape makes it an attractive target for investment firms.

This time, the pressure comes from Barington Capital, which amassed a stake of unknown size in the company with help from private equity firm Thor Equities.

What Barington wants: Barington’s main concern is Macy’s share price, which it believes is significantly undervalued compared with peers and doesn’t reflect the potential of its turnaround plan, the strength of its luxury business, or its extensive real estate portfolio.

It sees four main ways to boost the retailer’s value to shareholders:

• Reduce capital expenditures to 1.5% to 2% of total sales, from around 4% currently.
• Initiate $2 billion to $3 billion in stock repurchases over the next three years.
• Create an internal real estate subsidiary that would collect rents from Macy’s retail operations and make recommendations on how to maximize value from its holdings.
• Explore strategic alternatives—including a potential sale—for its luxury Bloomingdale’s and Bluemercury banners.

Our take: Macy’s struggles—with both declining sales and activist investors—reflect the broader challenges in the department store sector, which is losing traction with shoppers who prefer either the convenience of ecommerce or the value offered by off-price and big-box retailers.

While the retailer didn’t dismiss Barington’s proposal outright, it reiterated its confidence in its “Bold New Chapter” turnaround strategy, which includes closing underperforming locations, making its assortment more relevant to shoppers, and upgrading stores—and which even Barington admits is showing signs of progress.

Macy’s is also unlikely to consider offloading Bloomingdale’s and Bluemercury, given that the two banners are both its best performers and key to the retailer’s strategy to grow its presence in the luxury and beauty categories.

Go further: Stay tuned for our Q3 earnings report, where we’ll unpack the challenges facing the department store sector alongside broader retail trends.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.