Very Good Read here, posted Dec.12, 2023:
https://www.cnn.com/2023/12/12/business/macys-buyout-department-stores/index.html#:~:text=In%202015%2C%20activist%20investor%20Starboard,could%20be%20worth%20%2414%20billion.Private equity track record in retail
Some analysts say the investor group’s offer is too low for Macy’s.
Here's a snippet:
In 2015, activist investor Starboard said Macy’s properties were worth $21 billion, including $4 billion alone for its flagship Herald Square store in New York City, In 2017, Hudson’s Bay, the owner of Saks, said Macy’s could be worth $14 billion.
If a deal does go through, however, it could mean trouble for Macy’s retail business.
Investor groups such as private equity funds and hedge funds have been active in recent decades in buying struggling or under-performing retailers, with the stated goal of taking them private, improving their operations and selling them for a profit.
“An investor group that sells off real estate and perhaps takes other actions such as spinning off the ecommerce business would certainly make some short-term gains,” Saunders said. “But unless some of those profits were reinvested in revitalizing the core retail business, it would leave Macy’s in the worst of all worlds.”
The results have often led to bankruptcies for many well-known companies, such as Lord & Taylor, Toys R Us, Payless, Sears and others.
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