Jana Says Macy’s May Increase Value With Ecommerce Spin-Off
Macy’s department store icon (M) – Get the Macy’s Inc report could double its value by divesting its e-commerce business, according to activist investor Jana Partners.
Macy’s could thus increase its valuation to around $ 14 billion, in accordance with the Saks Fifth Avenue plan, Jana said in an investor presentation on Wednesday, Bloomberg reports.
He said Jana did not disclose whether she had a stake in Macy’s. The retailer told Bloomberg it is committed to providing a “dynamic and seamless omnichannel experience.”
“Macy’s e-commerce offering is a powerful combination and advances us as a strong omnichannel, digitally-led company,” he said.
Macy’s expects its online sales to total $ 8.35 billion to $ 8.45 billion this year, having jumped nearly 100% in the past four years, according to Bloomberg.
Macy’s ended regular session Wednesday up 26 cents, or 1.2%, to $ 22.56
Macy’s shares have doubled since the start of the year, as physical retail has rebounded in economic reopenings.
Morningstar analyst David Swartz estimates the stock’s fair value at $ 20.50.
“No-moat Macy’s struggles to stay relevant because consumers have so many choices,” he wrote last month. Moreover, its problems were exacerbated by the coronavirus crisis, which caused a 29% drop in its revenue in 2020 and an adjusted operating loss of nearly $ 1 billion. Unfortunately, we believe Macy’s large fleet of over 500 full-line stores limits its options.
While Macy’s operates stores in most of America’s leading malls, it also operates dozens of stores in weaker malls, some of which may not fully recover from the closures and economic fallout from the pandemic. “