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Archhouse Management and Brigade Capital Management have offered to buy Macy’s For $5.8 billion, people familiar with the matter told CNBC on Sunday.
According to sources, the offer values the retailer at $21 per share. Macy’s closed Friday at just $17 a share, down about 17% from the beginning of the year. The company’s shares rose by more than 21% on Monday.
Archhouse, a firm that primarily targets real estate investments, and Brigade Capital, an asset management firm, would be willing to make higher bids based on due diligence, sources said. The group will already be paying a premium for the department store, which has struggled to keep up with online competitors.
Macy’s has made several efforts to draw customers back to its brick-and-mortar chains. In October, it announced 30 new store locations in strip malls as it tried to move away from traditional shopping malls.
Despite turnaround efforts, Macy’s sales have declined, falling 7% year over year in the third quarter.
People wait in line outside Macy’s before the opening of “Black Friday” on November 24, 2023 in New York City. The retail sector’s efforts to entice holiday gift shopping reach a fever pitch this weekend with the annual “Black Friday” shopping day. The new “Cyber Monday.” (Photo by Yuki Iwamura/AFP) (Photo by Yuki Iwamura/AFP via Getty Images)
Yuki Iwamura AFP | getty images
The retailer expressed optimism after it beat Wall Street expectations in the most recent quarter. According to the numbers, the improvement in performance was mostly driven by sales of Macy’s-owned brands, such as Bloomingdale’s and BlueMercury, rather than Macy’s namesake chains.
Macy’s has become a takeover target as it struggles with declining sales and competition not only from online upstarts, but also from brands that sell their products directly to consumers rather than wholesale through department stores. Kohl’s It faced a similar takeover bid in 2022 when it received multiple takeover offers that it said undervalued its business.
Retailers across the board have faced headwinds this year as volatile interest rates and high inflation are weighing on consumers’ wallets. However, consumer spending has proven particularly resilient in the online shopping sector.
Consumer spending online was strong during Black Friday and Cyber Monday, but it’s still unclear how strong the holiday season will be after several retailers issued cautious fourth-quarter outlooks.
Archhouse, Brigade and Macy’s declined to comment.
The Wall Street Journal first reported the buyout offer.
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