What: The FT takes a position against the US trend of splitting companies between online and offline.

Why it is important: The article is not so much built on facts and figures than on opinion and gut feeling, which shows that the current debate is all about beliefs and hopes rather than certainties.

The Financial Times reports that Macy’s is supposedly looking at the same retail breakup between offline and online operations than the one Hudson Bay Company, and Saks, performed earlier in 2021. The strategy is based on a financial reasoning which leads owners to expect valorizations at multiple of their revenue (in the case of Saks.com, the expectation is a value representing 6 times its revenue).

The FT argues that in the case of Macy’s, stores play an important role in driving online sales, all the more than its omnichannel approach helps keeping shipping costs downs and driving foot traffic to stores. According to the newspaper, taking away stores would diminish the incentive to order online. Furthermore, the FT also points out the logistical and administrative chaos that such a break up would generate.

It is interesting to see that this column generated a high number of reactions in the reader’s section.

Financial Times agains retail break up