Shares of Macy’s shot up more than 20% in premarket trading Monday on a Wall Street Journal report that a private investor group has made a $5.8 billion offer for the iconic retailer.
The report said the offer, which would pay shareholders a 32% premium above the stock’s closing price Friday, comes from Arkhouse Management, a real-estate focused investing firm, and Brigade Capital Management, a global asset manager, noting that that the bidders had discussed the proposal with Macy’s.
It isn’t clear how the retailer views the proposal. An Arkhouse spokesman had no comment on the Journal report. Macy’s and Brigade did not immediately respond to a request for comment.
Macy’s has 722 store locations in 43 states, Washington, DC; Puerto Rico and Guam. It operates about 500 Macy’s branded stores, as well as 55 of the more upscale Bloomingdale’s branded stores and 160 locations of the beauty and skin-care chain Bluemercury, which it acquired in 2015.
Macy’s and other traditional department stores have struggled for decades now. Competition both from online retailers like Amazon and big box retailers, such as Walmart and Target – which offer shoppers the chance to buy groceries as well as clothes and other household goods – has left Macy’s with a smaller slice of the retail pie.
In recent years Macy’s has closed stores to cut costs. Its net income in the first three quarters of this fiscal year fell 74% compared to a year earlier. Sales at stores open at least a year were down 7%.
In June it cut its annual profit and sales forecast after customer demand slowed.
“The US consumer, particularly at Macy’s, pulled back more than we anticipated,” Macy’s CEO Jeff Gennette said on an earnings call Thursday. Customers “reallocated” spending to food, essentials and services, he said.
Gennette, who has run the 165-year old retailer for the last seven years, is set to retire in 2024.
Read the full article here
