Barington Capital is making waves at Macy's (M, Financial), and the message is clear: it's time for a shake-up. Partnering with real estate powerhouse Thor Equities, the activist investor is calling on Macy's to unlock the value of its massive property portfolio, pegged at $5–$9 billion, by creating a standalone real estate unit. Barington's plan doesn't stop there—they're also pushing for strategic moves with Bloomingdale's and Bluemercury, suggesting these luxury brands could perform better on their own. The cherry on top? They want Macy's to slash spending and repurchase $2–$3 billion in stock over the next three years, predicting these steps could drive a whopping 150%–200% return for shareholders.
This isn't Macy's first dance with activist investors, but Barington's timing is brutal. Macy's has been navigating a rough year, with its stock sliding nearly 17% and its market value stuck at $4.6 billion. CEO Tony Spring, fresh to the top job, has rolled out a plan to revamp stores and close underperforming locations, but progress has been slow. Adding to the chaos, a rogue employee's $154 million expense scandal rocked the company last month. Now, with earnings just days away, all eyes are on how Macy's leadership plans to address these latest demands while convincing investors that the company still has a future worth betting on.
For Barington and Thor, this isn't just about cutting costs; it's about rewriting Macy's playbook. They're pointing to Dillard's (DDS, Financial) as the blueprint—a retailer that slashed expenses, funneled cash into shareholders' pockets, and saw its stock soar. Macy's, they argue, has the same potential if it gets its act together. Shareholders will have to decide if this is the lifeline Macy's desperately needs—or just another chapter in the department store's long history of missed opportunities. Either way, the clock is ticking, and the stakes couldn't be higher.
