The Macy’s department store logo is seen inside the Macy’s department store in Herald Square on January 19, 2024 in New York City. The Macy’s department store chain announced that it will lay off approximately 2,350 employees, accounting for approximately 3.5% of its total workforce. The company said it would also close five stores to adapt to the era of online shopping. (Photo by Michael M. Santiago/Getty Images)
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department store macy’s department store on Monday said its board of directors unanimously decided to end talks with the activist group that had been seeking to take the retailer private for about $6.9 billion, saying in a statement that financing and premium issues were insurmountable.
“We concluded that Arkhouse and Brigade’s proposals lacked financing certainty and did not deliver compelling value,” said Paul Varga, Macy’s lead independent director. Press release.
Arkhouse and Brigade have been trying to acquire a stake in the storied retailer for months. Earlier this month, bidders raised their offer to $24.80, the latest in a series of price hikes since the takeover was first launched last year.
Macy’s said it went “well beyond what is typically required” during its due diligence, providing the group of bidders with store-by-store profit and loss information as well as lease information for each location. The company also noted that Arkhouse and Brigade have been allowed to share this confidential information with more than a dozen “reliable financing sources.”
After initial efforts were rebuffed, Ackerhouse said earlier this year he planned to launch a proxy fight to gain control of Macy’s. The two sides reached a settlement in April, adding two independent directors to Macy’s board.
Macy’s shares fell about 12% in premarket trading on Monday.
Macy’s is in the midst of a turnaround effort led by CEO Tony Spring, who Taking the top job in February. The department store operator announced earlier this year that it would Closing approximately 150 stores of the same name and opened new stores at Bloomingdale’s and Bluemercury, two brands that have seen stronger results. This is also Open smaller Macy’s stores In a bustling commercial street in the suburbs.
But the traditional department store operator’s efforts to boost sales have been hampered by high inflation as consumers become more discerning about spending on discretionary items. Macy’s has to Try to stay relevantLikewise, as younger shoppers turn to online shoppers like Shein, big-box stores like Target and discount chains such as TJ Max Rather than a department store.
Macy’s expects net sales for this fiscal year to be between $22.3 billion and $22.9 billion, down from $23.09 billion in 2023. The company expects that comparable sales, excluding the impact of store openings and store closures, will decrease by approximately 1% to increase by 1.5% on a self-owned plus licensed basis (including third-party market sales).
During an earnings call in late May, Spring said Macy’s was in the “early stages” of revitalizing its namesake stores. However he Point out better sales performance Macy’s has invested in more employees, clearer merchandise displays and special events in its top 50 stores.
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