Macy’s Real Estate: A Hidden Treasure?

Macy’s might be in a pickle, but some investors think there's gold in them thar hills – or rather, in their real estate. Activist investment firm Barington Capital and private equity firm Thor Equities have a wild idea: shut down Macy's shops and sell everything off, including their prized real estate. They believe Macy’s real estate, such as the famous Herald Square store in New York City, is worth more than the company itself. Their argument is that Macy’s struggles have made its stock value drop, but the real estate could be worth up to $9 billion. That’s nearly double the company’s current market value. One of their proposals is for Macy’s to pay rent to a separate company controlling the real estate, squeezing more value from it. Another idea is to build hotels, apartments, or offices on top of Macy’s stores to make even more money. Macy’s has 720 stores, including high-end department store Bloomingdale’s and beauty chain Bluemercury. Real estate investors have been eyeing Macy’s locations for a while now.

Macy’s isn’t sold on the idea yet. They're sticking to their plan to close underperforming stores and spruce up the top 50 stores with better staff and new goods. Experts warn that these investors might not be looking out for Macy’s long-term health. Similar situations with Sears and other big retailers resulted in more closures than success stories. Macy’s' troubles aren’t new; they’ve been losing out to online retailers and big-box stores for years. Their stock has taken a nosedive over the past decade. This isn’t the first time activist investors have tried to pressure Macy’s either. Earlier this year, they ended talks with private investors who wanted to take over the company. On top of all that, Macy’s just revealed a big mistake – an employee hid around $154 million in expenses over almost three years. This messed up their earnings report, which is coming out this Wednesday. It’s a tough time for Macy’s, but maybe there’s a glimmer of hope in their real estate?

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