Macy's is under considerable financial strain as the US economic downturn continues, and this may spell the end for their New York store.
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The iconic shopfront, featured in the Christmas classic, Miracle on 34th Street, may have to go as investors call for liquidation of assets. The world-famous retailer is struggling as many people move to online shopping. Due to this, it may be time for Macy's to say goodbye to their New York store.
Despite being a well-loved tourist attraction, the 2.5 million square feet Herald Square store is worth a fortune. It would fetch millions on the market, and boost the value of the Macy's stock across the board. Investors argue that this would be money better spent elsewhere.
Today, Barington Capital Group and Thor Equities own a lion's share of Macy's stock and have a lot of say over the future of the department store. Speaking about the potential sale of the Macy's New York store, and others, their spokesperson had this to say. "'We invested in Macy's because we believe the shares are mispriced relative to the upside potential we see in management's new strategic plan and the compelling value of the company's owned real estate assets." There is huge potential in the 521 struggling shop fronts around the country, and they want in.
Macy's New York Selloff Could Be It's Saving Grace
Sometimes you have to make a few sacrifices to succeed. This may be the situation faced by Macy's currently. Because of falling sales and rising costs of staff and rent, keeping so many massive shopfronts is wasteful. Many retailers have transitioned heavily to online outlets. Due to this, they are saving a fortune. With the changing face of retail, it may be the time for Macy's to do the same.
Macy's has an estimated real estate value between $5bn and $9bn, including their beautiful New York store. This, the investors argue, could be liquidated, and redistributed, completely revamping the store for the 21st century shopper.
As a result, it looks like Macy's is planning to streamline its outlets too. They have announced that they will be closing a total of 150 stores over the next five years. This includes 55 that will be closed by the end of 2025, but whether the New York Macy's is in that number will only stand to be seen.
