Investor Group Launches $5.8B Buyout Bid for Macy’s
Two major Macy’s investors, Arkhouse Management and Brigade Capital Management, are in talks to take the famed department store chain private, according to a report in The Wall Street Journal. Arkhouse Management, a real estate-focused investing firm, and Brigade Capital Management, a global asset manager, submitted a proposal to acquire Macy's for $5.8 billion on Dec. 1, the WSJ report said.
Macy’s has become an acquisition target as it grapples with sagging sales and competition from online upstarts, as well as brands that would rather sell their products directly to consumers than wholesale through a department store, according to reports.
Total Retail's Take: The time may be right for Macy's to go private and accept this buyout bid. Over the past few years, the company has faced stiff competition as online rivals continue to take a big bite out of its value.
Macy’s has made several efforts to draw customers back to its brick-and-mortar stores, to varying degrees of success. In October, for example, it announced plans to open 30 new store locations at strip malls in an effort to pivot away from monolithic shopping malls, which have been challenged by dwindling foot traffic and storefront vacancies. Furthermore, in an uncertain economy that has seen middle-income Americans — who drive most sales at Macy's namesake stores and website — watch their spending and rack up debt on their credit cards, Macy's has felt the pressure. The company cut its full-year forecast this summer, but had a strong third quarter relative to its past performance. What happens next, including the looming buyout offer, remains to be seen.
