Key Takeaways
- Macy’s announced a new strategy Tuesday as the department store giant tries to fend off a proxy fight by an activist investor.
- The plan calls for eliminating 150 Macy’s stores and adding more Bloomingdale’s and Bluemercury locations.
- Last week, Arkhouse Management launched a proxy fight after Macy’s rejected a takeover bid by the activist investor and partner Brigade Capital Management in December.
Macy’s (M) shares rose nearly 5% in intraday trading Tuesday after it announced 150 store closures in yet another turnaround plan, as the U.S. department store chain tries to shore up its finances and keep an activist investor at bay.
The owner of Macy’s, Bloomingdale’s, and Bluemercury stores said that it was launching “A Bold New Chapter”—a strategy it said would reposition it for growth as well as shareholder value.
The new plan comes a week Arkhouse Management launched a proxy fight for Macy’s, nominating nine members to the board after the department store company rejected a $5.8 billion buyout offer by the investor and partner Brigade Capital Management.
Included in Macy’s plan was the closing of 150 “underproductive” Macy’s locations over the next three years and expansion of its small-format stores.
While it is closing Macy’s stores, the company is also prioritizing its luxury offerings. It plans to add 15 Bloomingdale’s locations and 30 Bluemercury stores, with other locations at the beauty chain set to be remodeled.
CEO Tony Spring, who took the helm at the department store chain earlier this month, said the new strategy would “create a more modern Macy’s, Inc.”
Along with the new strategy, Macy’s reported adjusted fourth-quarter profit of $2.45 per share, with sales falling 1.7% to $8.12 billion. Both exceeded estimates.
Macy’s shares were trading up nearly 5% at about 12:30 p.m. ET, and are up 35% in the last three months.
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