Jana Partners Urges Macy’s to Separate eCommerce Business as it Snags Stake in Retailer

Jana Partners has taken a stake in Macy’s Inc. and is pushing the retailer to separate its $8 billion eCommerce business from its traditional brick-and-mortar business, The Wall Street Journal reported Thursday (Oct. 14), citing sources.

Investors have eyed Macy’s eCommerce business as a potential target and spinoff, some of the sources told the news outlet.

Jana sees Macy’s eCommerce business as potentially worth a multiple of its $7 billion market value. Jana first alluded to its interest in Macy’s at the 13D Monitor Active-Passive Investor Summit in New York last week without divulging it owns a stake in the retailer.

Related: Macy’s Embraces ‘Omnichannel Digital Retailer’ Mantra, But Lags Behind Peers

In February, Macy’s forecast that its eCommerce business would hit $10 billion by 2023. The company, which is best known for its 34th Street Manhattan location and sponsorship of the annual Thanksgiving Day Parade in New York City, told investors earlier this year that it sees itself as a “digitally-led, omnichannel retailer” that’s facing a year of “recovery and rebuilding.”

Macy’s which operates 750 stores across North America, said during its earnings call closing out fiscal 2021 that its digital revenues rose 21 percent for the 12 months that ended Jan. 30, 2021, and accounted for 44 percent of net sales. About 25 percent of Macy’s online orders were fulfilled in stores in the last fiscal year, including curbside pickup and same-day delivery.

Macy’s management refers to the company as a “digitally-led omnichannel retailer” rather than a department store.

Also read: Separation of Store, eCommerce Operations Draws Increasing Interest

Macy’s is committed to a “dynamic, seamless omnichannel experience,” it said in a statement this week. In early 2020, Macy’s embarked on a three-year restructuring to stabilize to turn the company into what it called a “digitally-led omnichannel retailer.”

“Our commitment to delivering a dynamic, seamless omnichannel experience across the customer shopping journey has never been stronger,” CEO Jeff Gennette told analysts in August.

Macy’s digital sales are expected to be between $8.35 billion and $8.45 billion after nearly doubling in the past four years, according to the company’s second-quarter earnings presentation in August.