(Reuters) – Barington Capital and Thor Equities urged Macy's (NYSE:) to create a real estate unit and consider options for its Bloomingdale's and Bluemercury chains after building a position, the activist investor group said on Monday without disclosing its involvement. .
The group said Macy's board lacks the “knowledge, vision and desire” to extract maximum value from its real estate assets, which it said were worth between $5 billion and $9 billion.
They also asked the company to cut its capital expenditures by about half, while they looked to appoint their representatives to the board.
Over the past decade, the group said, the company's valuation has “suffered noticeably” due to previous “management errors” and challenges in the department store sector.
The pressure for an overhaul comes as activist investors see strong sales at high-end chains Bloomingdale's and Bluemercury compared to Macy's namesake stores.
They also saw “promise” in the turnaround plan of CEO Tony Spring, who took over in February. Spring aims to save $100 million in costs this year by closing about 150 stores through 2026, while opening about 15 and 30 stores for Bloomingdale's and Bluemercury, respectively.
Macy's said it has always been “open-minded” to a review of its strategy and would engage with Barington and Thor.
Shares of Macy's, which will report its third-quarter results this week, rose 3% in premarket trading. Last month, the company delayed its results, saying that an employee hid up to $154 million in expenses for years.
The investment group also advised Macy's to “aggressively” buy back up to $3 billion in stock over the next three years.
Earlier this year, Macy's ended talks about an expanded takeover bid from the investment group consisting of Arkhouse Management and Brigade Capital Management.
The company's shares have lost about 18% of their value this year. Macy's had a market capitalization of about $4.6 billion as of Friday's close.
The Wall Street Journal first reported on Barington Capital's involvement that same day.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
