{"id":353619,"date":"2021-10-16T01:23:38","date_gmt":"2021-10-15T22:23:38","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/activist-hedge-fund-wants-macys-to-mimic-rival-saks-online-strategy\/"},"modified":"2021-10-16T01:23:38","modified_gmt":"2021-10-15T22:23:38","slug":"activist-hedge-fund-wants-macys-to-mimic-rival-saks-online-strategy","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/activist-hedge-fund-wants-macys-to-mimic-rival-saks-online-strategy\/","title":{"rendered":"#Activist hedge fund wants Macy&#8217;s to mimic rival Saks&#8217; online strategy"},"content":{"rendered":"<p>&#8220;<strong>#Activist hedge fund wants Macy&#8217;s to mimic rival Saks&#8217; online strategy<\/strong>&#8221;<\/p>\n<div>\n<aside class=\"single__inline-module alignleft\">\n        <\/aside>\n<p>An activist hedge fund that took a stake in Macy\u2019s is is pushing the department-store giant to follow its upscale rival Saks Fifth Avenue\u2019s online playbook, The Post has learned.<\/p>\n<p>In March, Saks separated its bricks-and-mortar business from its online division, with the latter becoming a new private company controlled by Saks whose value has exploded as demand for online luxury goods has boomed during the pandemic.<\/p>\n<p>Likewise, New York-based Jana Partners \u2014 headed by hard-charging billionaire Barry Rosenstein \u2014 is now proposing that Macy\u2019s split off its e-commerce business into a separate, privately held company, according to a source familiar with the situation. <\/p>\n<p>Macy\u2019s is reportedly in talks with private equity investors about investing in its e-commerce business, according to a Wall Street Journal report, which first disclosed a Wednesday letter from Jana to Macy\u2019s directors.<\/p>\n<p>In such a deal, Macy\u2019s could potentially keep control of its e-retailing business while securing additional backing to accelerate its fast-growing web sales. Macy\u2019s has said about 40 percent of its new customers come from its online channels, as opposed to its 700-plus physical stores.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-01-1-Macys-app.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Macy's app set against the company's logo.\" class=\"wp-image-19812738\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-01-1-Macys-app.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-01-1-Macys-app.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-01-1-Macys-app.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>The investor argues that Macy\u2019s e-commerce business is worth $14 billion or twice as much as Macy\u2019s current valuation.<\/figcaption><figcaption><span class=\"credit\">SOPA Images\/LightRocket via Gett<\/span><\/figcaption><\/figure>\n<p>Industry sources tell The Post that by separating the digital business from the bricks-and-mortar stores, retailers also can better attract tech talent. Saks.com has hired hundreds of employees who used to work for Amazon, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">App<\/a>le, Netflix and Disney, according to a source close to the company. <\/p>\n<p>These tech experts have improved Saks.com\u2019s search function, the speed of the site and its overall functionality, which has led to explosive growth at the company, the source said. Saks.com also doubled its marketing budget, which has not only fueled digital sales but benefitted Saks\u2019 physical stores as well.<\/p>\n<p>\u201cJana is seeing that\u201d and thinks Macy\u2019s should do the same, the source said. Macy\u2019s investors seem to agree: Its stock was up nearly 5 percent in the past week compared to gains of 1.5 percent in the broader market.<\/p>\n<p>Last week, Jana executive Scott Ostfeld hinted at the hedge fund\u2019s plan, saying Macy\u2019s e-commerce business could be worth $14 billion as a standalone entity \u2014 or twice Macy\u2019s current market valuation. Ostfeld pointed to Saks as an example of a company that successfully leveraged its fast-growing e-commerce site.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>The size of the stake taken by Jana \u2014 which has forced changes at other big companies, including Outback Steakhouse, Tiffany &amp; Co. and Whole Foods \u2014  hasn\u2019t been disclosed. Macy\u2019s, meanwhile, is working with Goldman Sachs and Wells Fargo to explore its options, the source said. Wells and Goldman declined to comment. Macy\u2019s didn\u2019t return requests for comment.<\/p>\n<p>Macy\u2019s online revenue accounts for about a third of its overall sales as of July 31 and it increased by 45 percent over the same period in 2019, according to the company\u2019s second quarter financial report. The company also said it added 5 million new customers in the quarter \u2014 or a 30 percent increase over the same period in 2019. More than 40 percent of the new customers came through the digital channel, the company reported at the time.<\/p>\n<p>Macy\u2019s Chief Executive Jeff Gennette has said that he expects Macy\u2019s digital sales to reach $10 billion within three years \u2014  up from $8 billion currently, according to The Journal.<\/p>\n<p>Macy\u2019s has faced activist investor pressures before. In 2015, Starboard Value took a steak in Macy\u2019s and demanded that its spin off its real estate assets. Macy\u2019s stood its ground, rejecting the idea and Starboard eventually sold its entire stake in the company.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-02-1-Macys-first-floor.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"As shopper walking on the first floor beauty department at Macy's.\" class=\"wp-image-19812795\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-02-1-Macys-first-floor.jpg?quality=90&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-02-1-Macys-first-floor.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-02-1-Macys-first-floor.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Macy\u2019s online sales have grown dramatically during the pandemic as more people shunned bricks and mortar stores.<\/figcaption><figcaption><span class=\"credit\">Bloomberg via Getty Images<\/span><\/figcaption><\/figure>\n<p>In March, Insight Partners invested $500 million for a minority stake in Saks.com, which values the company at $2 billion. But Toronto-based Hudson\u2019s Bay Company, which owns Saks Fifth Avenue, continues to own the majority of the luxury retailer\u2019s digital business. <\/p>\n<p>The deal has been working so well that Insight Partners was part of an investment group that took a $200 million stake in the digital business of Saks Off 5th, which was also split out from the bricks-and-mortar stores, in June.<\/p>\n<p>The success Saks.com is having will likely create pressure on other department stores to separate their digital businesses from the stores, including Nordstrom, the source said.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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In March, Saks separated its bricks-and-mortar business from its online division, with the latter&#8230;<\/p>\n","protected":false},"author":1,"featured_media":353620,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/10\/macys-03-1-exterior-of-Macys.jpg?quality=90&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[117554,77694,73910,70610,71070,73567,5015],"class_list":["post-353619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-10-15-21","tag-activist-investors","tag-corporate-activists","tag-finance","tag-hedge-funds","tag-macys","tag-retailers"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/353619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=353619"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/353619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/353620"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=353619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=353619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=353619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}