- Kristopher Fraser |
Activist investor Starboard Value LP has sold its stake in Macy's. Starboard had been pressuring Macy's to separate its retail business from its real estate business.
The move does give incoming chief executive officer Jeff Gennette more leeway with the company. Starboard's exit comes after Hudson Bay Co., the parent company of Lord & Taylor and Saks Fifth Avenue, failed to materialize their offer to buy Macy's.
Starboard wanted Macy's to extract cash from its real estate, which Macy's saw as a financial liability because they consider rent from sale leasebacks another form of debt.
In an effort to improve their financial performance, Macy's is shutting down some of its underperforming stores, and they have also entered a joint real estate venture with Brookfield Asset Management.
Former Macy's ceo Terry Lundgren is set to become executive chairman on March 23.
Starboard owned 3 million Macy's shares worth 107.8 million dollars according to the most recent public disclosure. However, Starboard proved to be no good for business since shares dropped 60 percent between 2015 when they first announced a position in the company and today.
Gennette already has some major plans for turning Macy's around. According to CNBC, his top five goals for the company are having dedicated clearance racks, relying on fewer sales associates, more focus on beauty, a decrease in coupons and more shop-in-shops.
In what could be a tough year for retail, as many expect the retail bubble to burst, Macy's is working to rebound their business.photo:via Macy's Facebook