{"id":37908,"date":"2023-07-19T19:53:44","date_gmt":"2023-07-19T23:53:44","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/someone-buy-macys-please\/"},"modified":"2023-07-19T19:53:46","modified_gmt":"2023-07-19T23:53:46","slug":"someone-buy-macys-please","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=37908","title":{"rendered":"Someone Buy Macy\u2019s, Please!"},"content":{"rendered":"
\n

Macy\u2019s\u2014the 165-year-old company that was one of the founders of the department store model in the United States, dominated the \u2018malling\u2019 of America, became the go-to brand of the last century, and was one of the first merchants to launch an e-commerce web site (in 1997)\u2014is today drifting toward retail oblivion.<\/p>\n

That\u2019s the conclusion of a growing number of Wall Street analysts and institutional investors who have turned negative on the company\u2019s prospects after years of disappointments.<\/p>\n

The latest was Macy\u2019s financial report for the most recent quarter (April 29, 2023), which included a dismal forecast: declining sales and earnings for the year. The news hammered the stock price down to a two-year low. Despite a bull market, Macy\u2019s trades for less than before the pandemic struck.<\/p>\n

The legendary company\u2019s tribulations aren\u2019t new, but they are notable because they come at the end of a much-touted three-year rejuvenation plan, code-named Polaris (North Star). Polaris was meant to address Macy\u2019s flat-footedness in dealing with the e-commerce tsunami and break out of a plateauing sales pattern. Then-CEO Jeff Gennette said the Polaris project aimed to \u201cstabilize profitability and position the company for growth.\u201d<\/p>\n

Polaris debuted just weeks before the Covid shutdown began, early in 2020. The timing couldn\u2019t have been worse, but the launch lacked vision and energy. The plan included closing 125 stores, laying off 2,000 employees, moving the headquarters to New York, and \u201ctesting new store formats.\u201d It was a stale, corporate-speak response in any event, especially against the unexpected backdrop of an unfolding crisis that demanded quick thinking and creativity.<\/p>\n

<\/fbs-ad><\/p>\n

To be fair, Macy\u2019s is one of a group of traditional merchants whose customers are either cutting back or dining out and traveling instead of consuming goods. The company says that about half of customers for the Macy\u2019s namesake brand have a household income of $75,000. But the dichotomy between Macy\u2019s and some of its principal competitors is stark.<\/p>\n

Macy\u2019s revenue peaked in 2014 and has been slowly eroding ever since (except for the sudden dip and rebound the economy experienced in 2021). The company\u2019s revenue is 10% lower today than in 2014. When you factor in inflation, it\u2019s less than half what it had been.<\/p>\n

Target\u2019s
\n TGT
\n <\/fbs-ticker> annual revenue was trending up before Covid, but the pandemic steepened the curve\u2014from $78 billion in 2019 to $109 as of the April quarter. Walmart
\n WMT
\n <\/fbs-ticker> added $100 billion in annual revenue since Covid broke, growing to about $620 billion.<\/p>\n

Is Macy\u2019s on a slippery slope to irrelevance, destined to join other once-venerable brands like Sears and JCPenney? It could be, according to retail analyst Neil Saunders of GlobalData. Earlier this year, he published a blistering report (for Wall Street) in which he took Macy\u2019s management to the woodshed.<\/p>\n

The company \u201cis great at talking a good game, [but] it consistently fails to execute well\u2026 Current management \u2026 has a habit of ignoring hard truths about the business and often seems disconnected from the realities on the ground in both stores and the wider retail market.”<\/p>\n

Macy\u2019s \u201cisn\u2019t dead or even circling the drain,\u201d Saunders concluded. \u201cHowever, it is still on a perilous glide path with weak long-term prospects.\u201d<\/p>\n

For years, the worst-case scenario for Macy\u2019s rested on its extensive real estate holdings. Past estimates of what that portfolio might be worth have ranged as high as $20 billion. Not anymore. Much of that property is related to malls, which the pandemic has hollowed out. Current estimates hover around $6 billion, more than the company\u2019s current market capitalization.<\/p>\n

Theoretically, you could buy Macy\u2019s, sell off the real estate, and get the brands (Macy\u2019s, Bloomingdale\u2019s, and beauty store chain Bluemercury) for free. That may be what it takes to save what\u2019s left, a vulture capitalist fight like the one that decided the fate of Bed Bath & Beyond, another retailer that poor management drove off a cliff.<\/p>\n

Another alternative might be to have a visionary buy the company and engage consumers to re-invent the brand with all its great history and proprietary assets while saving thousands of jobs simultaneously.<\/p>\n

Any takers?<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Macy\u2019s\u2014the 165-year-old company that was one of the founders of the department store model in the United States, dominated the \u2018malling\u2019 of America, became the go-to brand of the last century, and was one of the first merchants to launch an e-commerce web site (in 1997)\u2014is today drifting toward retail oblivion. That\u2019s the conclusion of […]<\/p>\n","protected":false},"author":1,"featured_media":37909,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-37908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-featured"],"yoast_head":"\nSomeone Buy Macy\u2019s, Please! | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Macy\u2019s\u2014the 165-year-old company that was one of the founders of the department store model in the United States, dominated the \u2018malling\u2019 of America,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=37908\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Someone Buy Macy\u2019s, Please! 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