Macy's Buyout? Private ownership bid

[ClownLoach]

CNBC is reporting certain institutional investors in Macy's have submitted a bid to take it private in a $5.8B deal. I recall a story a few years ago that just the NYC "Worlds Biggest Store" building and property was worth more than the entire company.

Aside from the work over the last few years to shed underperforming locations and address supply chain problems/inventory management issues, I think the company has been moving in the wrong direction. Merchandising hasn't kept up with the better managed inventory levels to keep the lower and medium volume stores looking full now that they're not allowed to order hundreds of coffeemakers, kitchen pots and pans sets and such to fill empty space with the same slow turning items bulked out. The pursuit of tiny small format boutique stores in box centers without sales isn't very attractive to the customers who are used to high/low/coupon pricing models, and they're becoming return centers with items they don't sell which have to either be transferred to a full line store or discarded, either way very expensive. And field management is clearly negligent or incompetent, allowing stores in some areas to fail to meet Ross, Kmart or Goodwill standards while the store up the street looks like a palace. But will the private ownership fix these issues, or gut the company for its assets and kill it?

https://www.cnbc.com/2023/12/10/macys-i ... t-bid.html

[storewanderer]

CNBC is reporting certain institutional investors in Macy's have submitted a bid to take it private in a $5.8B deal. I recall a story a few years ago that just the NYC "Worlds Biggest Store" building and property was worth more than the entire company.

Aside from the work over the last few years to shed underperforming locations and address supply chain problems/inventory management issues, I think the company has been moving in the wrong direction. Merchandising hasn't kept up with the better managed inventory levels to keep the lower and medium volume stores looking full now that they're not allowed to order hundreds of coffeemakers, kitchen pots and pans sets and such to fill empty space with the same slow turning items bulked out. The pursuit of tiny small format boutique stores in box centers without sales isn't very attractive to the customers who are used to high/low/coupon pricing models, and they're becoming return centers with items they don't sell which have to either be transferred to a full line store or discarded, either way very expensive. And field management is clearly negligent or incompetent, allowing stores in some areas to fail to meet Ross, Kmart or Goodwill standards while the store up the street looks like a palace. But will the private ownership fix these issues, or gut the company for its assets and kill it?

https://www.cnbc.com/2023/12/10/macys-i ... t-bid.html

I'm not sure going private will help the situation. It feels like a way to more rapidly separate the good parts from the bad, restructure debt, and who knows what the finished product will look like. Could they try to separate Macys and Bloomingdales? And that Blue Mercury thing whatever that is?

The share price has been depressed for too long so it is not surprising that some private equity groups I've never heard of before are trying to make a run here. Market cap is under $5 billion.

Meanwhile Dillard's share price and nearly $6 billion market cap is begging the family to sell out but they just won't bite.

[veteran+]

CNBC is reporting certain institutional investors in Macy's have submitted a bid to take it private in a $5.8B deal. I recall a story a few years ago that just the NYC "Worlds Biggest Store" building and property was worth more than the entire company.

Aside from the work over the last few years to shed underperforming locations and address supply chain problems/inventory management issues, I think the company has been moving in the wrong direction. Merchandising hasn't kept up with the better managed inventory levels to keep the lower and medium volume stores looking full now that they're not allowed to order hundreds of coffeemakers, kitchen pots and pans sets and such to fill empty space with the same slow turning items bulked out. The pursuit of tiny small format boutique stores in box centers without sales isn't very attractive to the customers who are used to high/low/coupon pricing models, and they're becoming return centers with items they don't sell which have to either be transferred to a full line store or discarded, either way very expensive. And field management is clearly negligent or incompetent, allowing stores in some areas to fail to meet Ross, Kmart or Goodwill standards while the store up the street looks like a palace. But will the private ownership fix these issues, or gut the company for its assets and kill it?

https://www.cnbc.com/2023/12/10/macys-i ... t-bid.html

I think gut..........................that's their future if this proceeds.

These "institutional investors" have a long rap sheet of what happens.

[ClownLoach]

CNBC is reporting certain institutional investors in Macy's have submitted a bid to take it private in a $5.8B deal. I recall a story a few years ago that just the NYC "Worlds Biggest Store" building and property was worth more than the entire company.

Aside from the work over the last few years to shed underperforming locations and address supply chain problems/inventory management issues, I think the company has been moving in the wrong direction. Merchandising hasn't kept up with the better managed inventory levels to keep the lower and medium volume stores looking full now that they're not allowed to order hundreds of coffeemakers, kitchen pots and pans sets and such to fill empty space with the same slow turning items bulked out. The pursuit of tiny small format boutique stores in box centers without sales isn't very attractive to the customers who are used to high/low/coupon pricing models, and they're becoming return centers with items they don't sell which have to either be transferred to a full line store or discarded, either way very expensive. And field management is clearly negligent or incompetent, allowing stores in some areas to fail to meet Ross, Kmart or Goodwill standards while the store up the street looks like a palace. But will the private ownership fix these issues, or gut the company for its assets and kill it?

https://www.cnbc.com/2023/12/10/macys-i ... t-bid.html

I think gut..........................that's their future if this proceeds.

These "institutional investors" have a long rap sheet of what happens.

This is going to be Sears 2.0. RIP Macy's if this happens because they will kill it fast. Sell all the real estate in leaseback deals which make the owners rich. Then they close each store as soon as it becomes cash flow negative, which will be nearly every store at today's high real estate prices.

[storewanderer]

This is going to be Sears 2.0. RIP Macy's if this happens because they will kill it fast. Sell all the real estate in leaseback deals which make the owners rich. Then they close each store as soon as it becomes cash flow negative, which will be nearly every store at today's high real estate prices.

They've already been doing sale-leasebacks so this would just speed up the pace?

[veteran+]

This is very sad to me, personally, if this happens.

Born in Manhattan and shopping at Macy's with Mom was always an incredible "event". She was a fashion designer and often showed us clothing that she designed. Wonderful memories!!!

[ClownLoach]

This is going to be Sears 2.0. RIP Macy's if this happens because they will kill it fast. Sell all the real estate in leaseback deals which make the owners rich. Then they close each store as soon as it becomes cash flow negative, which will be nearly every store at today's high real estate prices.

They've already been doing sale-leasebacks so this would just speed up the pace?

They did some, but until now they've rebuffed buyout offers because of the various stores they own in NYC and other markets where the real estate is worth an incredible fortune. The real estate value of just the Herald Square location (a 1.25 million square foot store) is higher than the stock value for the entire company. And there are a few others of high value. Of course if they had to pay market rent on Herald Square the store would have have closed long ago. The vultures don't care if they put 100,000+ people out of work if they can make a fast buck selling off these high value store facilities.

[storewanderer]

This is going to be Sears 2.0. RIP Macy's if this happens because they will kill it fast. Sell all the real estate in leaseback deals which make the owners rich. Then they close each store as soon as it becomes cash flow negative, which will be nearly every store at today's high real estate prices.

They've already been doing sale-leasebacks so this would just speed up the pace?

They did some, but until now they've rebuffed buyout offers because of the various stores they own in NYC and other markets where the real estate is worth an incredible fortune. The real estate value of just the Herald Square location (a 1.25 million square foot store) is higher than the stock value for the entire company. And there are a few others of high value. Of course if they had to pay market rent on Herald Square the store would have have closed long ago. The vultures don't care if they put 100,000+ people out of work if they can make a fast buck selling off these high value store facilities.

I can see why they are swooping in and trying to do this deal NOW. Real estate values in some of these large cities are still down due to COVID impacts but seem to be on the upswing. Now we have the news that some interest rate cuts are expected next year (perfect opportunity to flip these properties to other parties)...

I think time is of the essence here and if this deal does not happen FAST it is not going to happen.

I doubt they will be able to get it done fast enough. I am wondering if Macy's having a good/bad holiday will impact the situation in any way. Most accounts I am hearing is retail is having a tough holiday from people I talk to who are out in the field. But I haven't heard anything about Macy's specifically.

[Romr123]

News story yesterday that Michigan's retail sales were down in November from 52 to 43 (index is 100) y o y, but the UAW strike had a significant effect.

[ClownLoach]

News story yesterday that Michigan's retail sales were down in November from 52 to 43 (index is 100) y o y, but the UAW strike had a significant effect.

An index compared to what? Doesn't seem meaningful as a standalone statistic.