Activist investor Barington Capital has built a position in Macy’s and is pushing the department- store operator to make changes to boost its slumping stock, including the creation of a separate real-estate unit within the company.
Barington has teamed up with property-owner Thor Equities on its investment, according to the presentation.
The investors believe Macy’s shares are significantly undervalued and that the company should create a real-estate subsidiary that focuses on maximizing the value of its owned and leased locations. They believe Macy’s real estate alone is worth between $5 billion and $9 billion, which is more than the company’s current market value.
Barington and Thor are also pushing Macy’s to consider strategic alternatives for two other chains it owns, Bloomingdale’s and Bluemercury.

The investors see those as luxury brands that would trade at a higher multiple on their own.
They are further asking Macy’s to cut capital expenditures to between 1.5% and 2% of total sales, from about 4%, and buy back at least $2 billion to $3 billion in stock over the next three years. All told, these changes could help boost Macy’s shares by as much as 200% over the next three years.

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