Macy’s Investors Reportedly Launch $5.8 Billion Bid to Take Retailer Private

A group of investors reportedly wants to make department store chain Macy’s a private company.

Real estate investment firm Arkhouse Management and Brigade Capital Management, a global asset manager, made a $5.8 billion bid for shares of the company they don’t own, The Wall Street Journal (WSJ) reported Sunday (Dec. 10), citing sources familiar with the matter.

The report says these investors believe Macy’s is undervalued on the public market and have said they would raise their offer, subject to due diligence. An investment bank has reportedly signed a letter attesting to the group’s ability to finance the deal.

The group is offering $21 per share, higher than what Macy’s has been trading at in recent days but far lower than where the company was at in 2015, when it traded at $70 per share, the WSJ report said. Since then, the report notes, “nimbler” digital retail players have taken a bite out of Mac’’s and its contemporaries’ business. 

As noted here in March, Macy’s and other chains have begun adapting to slowing consumer demand by shrinking operations. For Macy’s, that meant rolling out smaller format stores, a trend that has continued throughout the year.

“It is pretty clear that consumers continue to cherish convenience and ease along with discounts and more affordable prices — factors that smaller merchants may be better able to appeal to,” PYMNTS wrote in May. 

“While those responses may not seem revelatory on the surface, it is also notable that so many retailers are making these moves to reflect this consumer behavior instead of expecting shopper habits to bounce back after some uncertain normal presumably returns.”

Macy’s said in October it plans to open as many as 30 additional small-format stores across the United States, as it embarks on an accelerated expansion strategy.

As noted here, this could triple the number of small-format stores operated by Macy’s by fall 2025, with the new locations joining the almost 15 small-format Macy’s and Bloomie’s stores already in operation. The company plans to start opening these new locations in 2024.

The company says these stores are designed to complement Macy’s digital experience and improve the overall store portfolio, giving customers a shopping experience across various channels. The stores will be located in both on- and off-mall locations, letting the retailer reach customers more effectively and encouraging frequent visits.