Macy’s shuts down private buyout talks even as its mall-staple rivals get scooped up
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Cancel the parade… Investing firms Arkhouse Management and Brigade Capital Management won’t be celebrating buying Macy’s after the Bloomingdale’s owner turned down the pair’s $6.9B acquisition bid. The firms have been courting Macy’s for seven months, upping their proposed price twice. But the department store — which last year reported its lowest sales in nearly two decades (excluding 2020) — still deflated the firms’ hopes like last year’s Thanksgiving balloons. Macy’s stock fell 15% on Monday after the news.
Hostile: Macy’s called the decision “unanimous,” despite two of its board seats being Arkhouse-backed (the firm tried to take over its board and force an acquisition).
Bogo no-go: Macy’s said the firms didn’t provide an “actionable” plan. Critics said the buyout would’ve squeezed value out of the retailer (think: selling off stores) at the expense of long-term growth.
Department stores’ massive sale… of themselves. Private-equity firm Rhône Capital will soon be the lead investor in Saks Global (the recent merger of Saks Fifth Avenue and Neiman Marcus), and Nordstrom is reportedly putting out feelers for a PE deal. In theory, private buyers snatch up companies with rocky performance to try to boost their profitability. But sometimes they scrap retailers for parts, deeming components like real estate more valuable than the core biz. Critics argue this “vulture capitalism” is what shut down thousands of Sears and Toys “R” Us stores.
Change starts on the inside… Real-estate-focused Arkhouse denied critics’ claims that it would gut and sell Macy’s stores. But the retailer’s still shunning outside aid, instead planning a turnaround on its own terms that concentrates on smaller stores and luxury goods. Private buyouts have been an option of last resort for mall staples that lost sales to ecomm giants like Amazon, but Macy’s is betting it can make its own miracle on 34th Street.