What: Activist investors Barington Capital Group and Thor Equities urge Macy's to consider spinning off Bloomingdale's and Bluemercury, create a real estate subsidiary, cut capital expenditures, and initiate substantial stock buybacks, citing Dillard's successful strategy as a model.

Why it is important: This latest activist challenge highlights the ongoing tension between long-term retail transformation strategies and immediate shareholder returns. The pressure from these new activists demonstrates the complex challenges facing traditional department stores as they balance operational investments, real estate value, and shareholder demands while competing in an evolving retail landscape.

Barington Capital Group and Thor Equities are pressuring Macy's to implement significant changes to enhance shareholder value, including potential spinoffs of Bloomingdale's and Bluemercury, creation of a separate real estate subsidiary, and substantial stock buybacks of $2-3 billion over three years. Barington points to Dillard's success, noting its 788% total shareholder return compared to Macy's -12% since 2018. The activists criticise Macy's $9.7 billion capital expenditure over the past decade, during which the company lost $15 billion in market capitalisation. While acknowledging promise in Macy's current "Bold New Chapter" strategy, they argue for more aggressive measures to unlock value, particularly from real estate assets estimated between $5-9 billion.

IADS Notes: Under CEO Tony Spring's "Bold New Chapter" strategy, Macy's is already implementing significant changes, including closing 150 stores while expanding Bloomingdale's and Bluemercury. This latest activist pressure follows earlier challenges from Arkhouse and Brigade Capital, highlighting the ongoing tension between Macy's transformation plans and activist demands for more aggressive changes.

Activists push Macy’s to cut CapEx and consider selling Bloomingdale’s