Businesshala News Exclusive | Jana Partners Takes Stake in Macy’s, Urges E-Commerce Spinoff

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Activist investor says stand-alone e-commerce business will be worth multiples of Macy’s current market value

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Macy’s largest department store rival, Saks Fifth Avenue, is planning to separate its e-commerce business from its store operations, which includes an additional investment. Some said Macy’s e-commerce business has already drawn interest from firms that might invest in it with a spinoff.

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Jana believes that a stand-alone e-commerce business would be several times Macy’s current market value, which stood at about $7 billion on Thursday after its most recent rally. Macy’s shares have still declined significantly over the past several years, while online-only retailers such as Farfetch are undervalued. Ltd.

And Mytheresa has increased.

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Macy’s shares have risen this year, and about $23 is now more than three times the low they fell in 2020. The company’s market capitalization in 2015 was over $20 billion.

Jana indicated her interest in Macy’s at the 13D Monitor Active-Passive Investor Summit in New York last week, suggesting the retailer should divest its e-commerce business without revealing it or providing other details.

New York-based Macy’s, which also owns Bloomingdale’s brand,, like other department stores, was hit hard last year by the Covid-19 pandemic, which forced the temporary closure of physical stores. Meanwhile, online sales have increased as more customers shop from home.

Macy’s chief executive Jeff Janet said in February that he expects digital sales to reach $10 billion within three years. For the holiday quarter ended January 2021, digital accounted for 44% of total sales.

Macy’s total revenue for the fiscal year ended January 2021 was $18 billion, down from about $25 billion in the previous fiscal year. The company is forecasting revenue and return on profitability of approximately $24 billion for the current fiscal year. Last week, it added two new board members: the CEO of Michaels Cos and a Zipcar executive.

Earlier this year, the Hudson’s Bay Company said it was divesting to try to capitalize on the boom in online shopping during the pandemic. (After the financial move, the two businesses are still integrated from a customers standpoint.) Venture-capital firm Insight Partners said it would invest $500 million for a minority stake in, which is valued at $2 billion.

Many retailers have integrated their online and store operations more closely. Stores are increasingly being used to fulfill online orders and shoppers can use them to take and return digital orders.

This is at least the third time that Macy’s has faced an active investor campaign in recent years. But in a sign of how far the retail world has been moved by online shopping and the Covid-19 pandemic, investors first called on the company to unlock the value of its real-estate holdings.

In 2015, Starboard Value LP took a stake in Macy’s and called for the company to divest its real estate, which included suburban malls as well as hundreds of stores in city centers. Macy’s rejected the idea and instead the company promised to find joint venture partners for its real estate. Macy’s has announced plans to redevelop some locations and build an office tower above its flagship Herald Square store in New York City.

Dana Similuca at [email protected] and Cara Lombardo at [email protected]


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