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Jana Partners urges Macy's to separate e-commerce business

NEW YORK : Activist investment firm Jana Partners said on Wednesday that the share price of retailer Macy's could double if the company separated its e-commerce business as customers buy more online.

"Macy's could see an increase in its stock price by 100per cent if it followed the playbook of Saks," Jana Partners portfolio manager Scott Ostfeld said at the 13D Monitor Active-Passive Investor Summit. He did not explicitly say whether the firm owns a stake in the company.

He said Macy's online business could be worth about US$14 billion. Macy's as a whole has a market valuation of about US$6.9 billion.

Saks Fifth Avenue announced plans this year to split off its e-commerce unit, allowing Saks.com to continue its strong growth.

Ostfeld said Macy's could create a digital goldmine and delight investors who may now be betting that the retailer's stock price will fall, not rise, by selling it short.

The stock is currently trading at US$22.28 and has fallen 42per cent in the last five years.

He said the market isn't properly valuing the bricks and mortar retailer's digital business and said a separation would spell a real miracle on 34th Street, referring to the American Christmas movie called "Miracle on 34th Street," where Macy's flagship store in Manhattan is located.

Jana has built a reputation for working collaboratively and behind the scenes over the two decades since Barry Rosenstein founded the company.

(Reporting by Svea Herbst-Bayliss; Editing by Steve Orlofsky)

Source: Reuters

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