Macy’s ends acquisition talks with Arkhouse and Brigade

Arkhouse and Brigade have been trying to buy the popular retailer for months. Earlier this month, the bidders raised their offer to $24.80, the latest in a series of price hikes since launching their takeover bid last year.

Macy’s said the company went “well beyond what is typically required” during a due diligence period, providing the bidding group with store-by-store profit and loss information and leases for each location. The company also noted that Arkhouse and Brigade were permitted to share that confidential information with more than a dozen “credible financing sources.”

After failing in its first attempts, Arkhouse announced earlier this year that it would fight through proxy bids for control of Macy’s. The two sides were able to reach a deal in April, adding two independent directors to Macy’s board.

Macy’s shares fell about 12% in premarket trading Monday.

Macy’s is in the midst of a turnaround under CEO Tony Spring, who took over in February. The department store operator said earlier this year that it would close about 150 of its namesake stores and open new ones from Bloomingdale’s and Bluemercury, its two brands that have performed better. It is also opening smaller Macy’s stores in busy suburban malls.

But the former department store operator’s efforts to boost sales have been hampered by high inflation as consumers become more selective in their purchases of non-essential items. Macy’s has also struggled to stay in the game as younger shoppers turn to online players like SheIn, big-box stores like Target and discount chains like TJ Maxx instead of department stores.

For the fiscal year, Macy’s expects net sales to be between $22.3 billion and $22.9 billion, down from $23.09 billion in 2023. It expects comparable sales, which exclude the impact of store openings and closures, to range from a decline of approximately 1% to an increase of 1.5% on an owned and licensed basis and including sales in third-party markets.

In a financial results call in late May, Spring said Macy’s was “laying the groundwork” to revitalize its namesake stores. But he pointed to stronger sales results at the top 50 stores, where Macy’s had invested in additional staff, more polished merchandise displays and special events.

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