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The barbarians have arrived at Macy’s gate

<i>Yuki Iwamura/AFP/Getty Images</i><br/>Shoppers carry Macy's bags during
Yuki Iwamura/AFP/Getty Images
Shoppers carry Macy's bags during "Black Friday" in New York on November 24

By Nathaniel Meyersohn, CNN

New York (CNN) — Macy’s rejected an unsolicited $6 billion bid from an activist investor to take the famed department store private last month. Now, the activist group is taking another shot at Macy’s, launching a proxy fight to take control of the board.

Arkhouse Management Co., a real estate investment group, nominated nine directors to Macy’s board of directors, effectively trying to seize control of the 14-member board.

“The Board’s history of poor performance and continued refusal to engage constructively with our credible and motivated buyer group have led us to the decision to nominate a slate of highly qualified, independent directors to reconstitute Macy’s Board,” Arkhouse said in a statement Tuesday.

Macy’s stock price has dropped 75% from a peak of $73 a share in 2015. Since then, it has closed nearly 300 stores — almost one third of its locations — but still operates about 700 across its brands.

Last month, Macy’s announced it was laying off about 3.5% of its workforce, or roughly 2,350 employees.

The company’s struggles have attracted the attention of activist investors, such as Arkhouse.

Macy’s said Tuesday it will evaluate Arkhouse’s proposed board candidates, but criticized Arkhouse and another activist investor, Brigade, in a statement.

“Arkhouse and Brigade have yet to provide any financing details that would enhance the actionability of their proposal despite multiple opportunities to do so, and instead of attempting a constructive dialogue, Arkhouse has chosen to launch a proxy contest,” Macy’s said in a statement.

But Arkhouse fired back, saying in a statement to CNN that “we have persisted in our attempts to resolve any supposed concerns privately with the Board since the  Company’s rejection of our proposal. To that end, we provided the Board with additional details regarding our financing, including names of our highly regarded equity partners – which have more than $75 billion in combined assets under management – for the 50% equity component of the transaction. We also reminded the Board that we remain optimistic that we will be able to increase the proposed purchase price based on customary due diligence, which the Company has refused to grant us.”

Macy’s has struggled against rising competition and a migration of shoppers away from department stores.

The company has attempted numerous strategies in recent years to revitalize business, such as new brands and smaller stores, but the moves have not altered its long-term trajectory.

Arkhouse did not publicly disclose its plans for Macy’s, but analysts believed it would sell off Macy’s valuable real estate and perhaps take other actions, such as spinning off its e-commerce business.

But Macy’s “determined that the proposal was not actionable and lacked compelling value.”

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