Another activist takes aim at Macy's, seeking spending cuts and real-estate restructuring

Activist investor Barington Capital revealed Monday it had a position in Macy’s and was looking for the company to cut spending, weigh the sale of its luxury brands and take a hard look at its real estate portfolio.

It’s the fourth activist push at the struggling department store in the last decade.

Macy’s shares were up roughly 3% on the news in premarket trading. The activist has partnered with private equity firm Thor Equities in its push, according to a Barington presentation. The dissidents did not disclose the size of its stake.

The activist believes that Macy’s can cut more from its inventory and sales and administrative costs. Barington said in its presentation that while the business continues to generate cash, management has chosen to spend nearly $10 billion on capital expenditures while neglecting buybacks or dividends.

Macy’s shares have underperformed the S&P 500 and Retail Select indexes over the last 10 years. Barington pointed to smaller department store operator Dillard’s, where it also tilted with management, as an example of effective capital allocation. Dillard’s has a market cap of more than $7 billion and says it operates 273 stores in the U.S.

“We remain confident in our Bold New Chapter strategy,” Macy’s said in a statement. “We look forward to engaging with our shareholders, including Barington and Thor.”

Barington wants Macy’s to beef up its buybacks and assess whether it should sell off its better performing Bluemercury and Bloomingdale’s brands.

Barington, like other activists that have preceded it, also believes that Macy’s should take a fresh look at its real estate portfolio. Barington values it at anywhere from $5 billion to $9 billion, echoing analyses done by other activist investors. Barington said Macy’s should create a separate subsidiary, which could in turn charge rent to Macy’s parent company while the subsidiary’s management assessed how to maximize value from those assets.

Macy’s has become an activist target again as sales at the company’s namesake stores decline and it continues to close many of the mall anchors.

The department store operator announced in February that it would shut about about 150 – or nearly a third – of its namesake stores by early 2027. It plans to invest in the roughly 350 locations that remain and invest in its stronger chains, higher-end department store Bloomingdale’s and beauty retailer Bluemercury.

In the most recent quarter that ended Nov. 2, Macy’s said the company’s sales fell 2.4% to $4.74 billion. Comparable sales for its owned and licensed businesses, plus its online marketplace, dropped 1.3%.

Macy’s postponed releasing full results for the quarter as it faces scrutiny for another reason. The company said it is investigating after it discovered an employee intentionally hid up to $154 million in delivery expenses on its accounting books for nearly three years. It said it plans to share full results and its outlook by Dec. 11.

Selling real estate as Macy’s closes stores could free up cash for the business. Macy’s owns many of its mall-anchor stores, but has not said which locations it has sold. In late November, it said asset sale gains in the most recent quarter totaled $66 million and were higher than its expectations.

In recent quarters, Macy’s has started to report the sales performance of stores that will remain open once it closes the latest round of namesake locations. That cuts out some mall stores that are struggling. At the Macy’s stores that will remain open beyond early 2027, comparable sales were down 0.9% on an owned-plus-licensed basis, including the third-party marketplace.

Barington has mounted campaigns at other big consumer names, including toymaker Mattel, The Children’s Place, Hanes and Steve Madden. Thor Equities is a retail-focused private equity firm, and was part of the buyout group which acquired Hurley several years ago.

Correction: A previous version of this article misnamed the private equity firm that Barington Capital has partnered with. It is Thor Equities.