Investors in Macy’s are reportedly launching a $5.8 billion bid to take the retailer private
According to reports, a group of investors intends to turn the department store chain Macy’s into a private business.
The Wall Street Journal (WSJ) reported on Sunday, December 10, citing persons familiar with the situation, that real estate investment firm Arkhouse Management and global asset management Brigade Capital Management launched a $5.8 billion bid for shares of the company they do not own.
These investors, according to the article, feel Macy’s is undervalued on the open market and have stated they will increase their offer, subject to further investigation. According to reports, a letter confirming the group’s capacity to fund the transaction was signed by an investment bank.
According to the WSJ story, the consortium is asking $21 per share, which is more than what Macy’s has been selling for recently but much less than where the firm was in 2015 when it traded for $70 per share. According to the report, since then, Mac’s and its competitors’ businesses have been negatively impacted by “nimbler” digital retail players.
Macy’s and other chains have started to reduce operations in response to the weakening consumer demand, as was mentioned here in March. This resulted in Macy’s opening smaller format stores, a trend that has persisted all year.
“It is pretty clear that consumers continue to cherish convenience and ease along with discounts and more affordable prices — factors that smaller merchants may be better able to appeal to,” Reports wrote.
“While those responses may not seem revelatory on the surface, it is also notable that so many retailers are making these moves to reflect this consumer behavior instead of expecting shopper habits to bounce back after some uncertain normal presumably returns.”
As part of its expedited development strategy, Macy’s announced in October that it intends to open up to 30 more small-format stores nationwide.
By the fall of 2025, Macy’s might have tripled the number of its small-format stores, as previously mentioned. The new locations will join the nearly 15 small-format Macy’s and Bloomie’s stores that are currently open. In 2024, the business intends to begin opening these new locations.
According to the firm, these stores are made to enhance the total retail portfolio and complement Macy’s digital experience by providing customers with a multichannel shopping experience. The retailers will be able to reach clients more efficiently and encourage repeat business because the businesses will be situated in both on- and off-mall locations.