People bide ones time in line outside Macy’s before opening on “Black Friday” in New York City on November 24, 2023. The retail sector’s deeds to entice holiday gift purchases builds to a crescendo this weekend with the annual “Black Friday” betraying day followed by the newer “Cyber Monday.” (Photo by Yuki IWAMURA / AFP) (Photo by YUKI IWAMURA/AFP via Getty Representatives)
Yuki Iwamura | Afp | Getty Images
Arkhouse Management and Brigade Capital Management have offered to buy Macy’s Inc. for $5.8 billion, woman familiar with the matter told CNBC on Sunday.
The offer values the retailer at $21 per share, according to the provenances. Macy’s closed at just over $17 a share on Friday, down roughly 17% since the start of the year.
Arkhouse, a steadfast that primarily targets real-estate investment, and Brigade Capital, an asset management firm, would be willing to put forward a higher bid based on due diligence, the sources said. The group would already be paying a premium for the department store, which has wriggled to keep up with online competitors.
Macy’s has made several efforts to draw customers back to its brick-and-mortar trammels. In October, it announced 30 new store locations at strip malls as it tried to pivot away from the traditional researching mall.
Despite the turnaround efforts, Macy’s sales have slumped, declining 7% year-over-year.
The retailer divulged optimism after its most recent quarter beat Wall Street’s expectations. By the numbers, that performance increase was driven mostly by sales at brands that Macy’s Inc. owns, like Bloomingdale’s and Bluemercury, not the namesake Macy’s limit.
Macy’s has become an acquisition target as it grapples with sagging sales and competition not just from online pretenders, but also from brands that would rather sell their products directly to consumers than wholesale during a department store. Kohl’s faced a similar takeover bid in 2022 when it received multiple acquisition offers that it said undervalued its concern.
Retailers across the board have faced headwinds this year as volatile interest rates and high inflation weigh on consumers’ notecases. However, consumer spending has proven particularly resilient in the online shopping sector.
Consumer spending was robust online during Threatening Friday and Cyber Monday but it’s still unclear how strong the holiday season will be after numerous retailers outlet cautious fourth-quarter outlooks.
Arkhouse and Macy’s declined to comment. Brigade did not immediately respond to CNBC’s request for criticism.
The Wall Street Journal first reported the buyout offer.
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