(Reuters) – Barington Capital and Thor Equities urged Macy’s (NYSE:) to create a real estate unit and consider options for its Bloomingdale’s and Bluemercury chains after building a position, the activist investor group said on Monday without disclosing their stake.
The group said Macy’s board lacks the “knowledge, vision and desire” to extract the maximum value of its real estate assets, which it said was worth between $5 billion and $9 billion.
They also asked the company to cut its capital expenditure by about half, while seeking to name their representatives to the board.
Over the past decade, the group said, the company’s valuation has “suffered markedly” due to previous “management missteps” and challenges in the department store sector.
The push for a review comes as the activists investors see strong sales at higher-end Bloomingdale’s and Bluemercury chains compared with Macy’s eponymous outlets.
They also saw “promise” in the turnaround plan of CEO Tony Spring, who took charge in February. Spring aims to save $100 million in costs this year by closing about 150 stores through 2026, while opening about 15 and 30 stores for Bloomingdale’s and Bluemercury, respectively.
Macy’s said it has always been “open-minded” to a review of its strategy and would engage with Barington and Thor.
Shares of Macy’s, which is set to report its third-quarter results this week, rose 3% in premarket trading. The company had last month delayed its results, saying an employee hid as much as $154 million in expenses over years.
The investor group also advised Macy’s to “aggressively” repurchase up to $3 billion worth of stock over the next three years
Earlier this year, Macy’s ended talks over an extended take-private bid from investor group comprising Arkhouse Management and Brigade Capital Management.
The company’s stock has lost about 18% of their value this year. Macy’s had a market capitalization of about $4.6 billion as of Friday’s close.
The Wall Street Journal first reported about Barington Capital’s stake earlier in the day.
