In a sudden turnaround this month, Macy’s appears to be free to find new ways to grow after a key investor has pulled out and a potential rival is shopping elsewhere for a takeover target.
As USA Today reports, Macy’s has been scrambling to spur sales after a string of earnings and sales disappointments. Pressure intensified in summer 2015 when Starboard Value LP purchased a major stake in the Cincinnati-based retailer and pressed it to sell off real estate assets.
Macy’s cut expenses and shuttered stores, including its Cortana Mall location in Baton Rouge. It pursued multiple new growth initiatives. But sales continued to slump, prompting Macy’s stock to lose half its value.
Last month, reports emerged of a potential Macy’s takeover by Saks owner Hudson’s Bay Co., which probably would have been paid for in part with massive cuts. However, after a year and half of drama, The Wall Street Journal reported Hudson’s Bay had shifted its sights to Macy’s smaller rival, Neiman Marcus. Reuters later reported that Starboard Value LP had sold off its Macy’s stake, signaling an end to its campaign to influence corporate strategy.
With no looming takeover or no activist investor meddling in its affairs, newly minted CEO Jeff Gennette has leeway to implement, refine and experiment with his turnaround plans. So far, Gennette’s plans appear to be a lot of dabbling with more discount sections in Macy’s stores, more stores within Macy’s stores, a wider selection of private-label beauty products, fewer coupons and even self-serve shoe departments.
USA Today has the full story.
