Macy’s Faces Investor Shakeup: Could Bloomingdale’s Be the Next to Split Off?

Macy’s Inc. is under fresh pressure from activist investors who are urging the department store chain to radically restructure, including exploring strategic alternatives for Bloomingdale’s and Bluemercury.

In a joint statement issued Monday, Barington Capital Group and Thor Equities outlined a sweeping plan to “enhance shareholder value.” Their proposals include:

• Cutting capital expenditures nearly in half

• Repurchasing $2 billion in shares

• Creating a dedicated real estate arm to monetise store locations

• Adding representatives from both firms to Macy’s board

• And most notably, considering spinning off Bloomingdale’s and Bluemercury

This latest activist effort echoes familiar investor strategies aimed at unlocking value, particularly through Macy’s real estate portfolio, long viewed as a golden goose by Wall Street. But retail analysts caution that such tactics could backfire for consumers.

“Barington’s vision doesn’t turn Macy’s into a Dillard’s. It turns Macy’s into an ATM that will be quickly emptied,” said Neil Saunders, Managing Director at GlobalData.

Why Shoppers Should Care

While the proposals are framed around shareholder returns, CouponOutlet readers should pay attention to the broader retail implications, especially as Macy’s undergoes its “Bold New Chapter” transformation plan.

Cutting capital investments from 4% to 1.5–2% of sales could mean fewer store upgrades, reduced staff, and slower tech innovation — all of which affect the shopping experience. In contrast, other department stores like Nordstrom and Target have doubled down on digital improvements and experiential shopping.

“If enacted, their changes would likely leave the core Macy’s fascia in a weakened position,” said Saunders. “Reducing capital expenditure is especially risky as Macy’s needs to reinvent stores and their value proposition to stay relevant.”

A Tale of Two Retailers: Macy’s vs. Dillard’s

The activist firms frequently held up Dillard’s as a model of operational excellence. In their public letter, Barington Chairman James Mitarotonda noted that Dillard’s has returned 60% of cash to shareholders since 2018 — compared to Macy’s 25% — and has delivered 788% in shareholder returns, versus a 12% decline at Macy’s.

But the comparison may be apples to oranges. Dillard’s is a tightly run, family-controlled company with a much smaller footprint, operating just 273 stores across 30 states. Macy’s, meanwhile, spans hundreds of locations nationwide and manages three distinct retail brands.

“Dillard’s has better stores, a clearer fashion focus, and stronger cost discipline,” said retail expert Nick Egelanian. “But what the activists are proposing isn’t about retail excellence — it’s about extracting short-term value.”

What’s Next for Bloomingdale’s and Bluemercury?

Barington and Thor want Macy’s to “evaluate strategic alternatives” for Bloomingdale’s and Bluemercury, which includes the possibility of spinoffs or sales. But both brands have outperformed Macy’s core stores recently.

• Bloomingdale’s Q3 comps rose 3.2%, and

• Bluemercury comps grew 3.3%, according to Macy’s preliminary earnings

These strong results suggest that breaking up the company could destabilise its most promising assets just as Macy’s is attempting a brand revival.

Conclusion: Real Estate vs. Real Retail

The investors’ plan includes creating an internal real estate subsidiary to extract value from Macy’s estimated $5–$9 billion in property holdings, especially flagship locations like Herald Square in New York.

But critics warn that this can saddle Macy’s with long-term lease obligations, similar to what led to Sears’ collapse. The financial upside may come at the expense of operational flexibility and customer trust.

Macy’s has said it will consider the proposals and remains confident in its existing strategy, which includes closing 150 stores and shifting focus to digital innovation and smaller-format locations.

“We have consistently demonstrated open-mindedness … and are exploring all paths to enhance value,” Macy’s said in a statement.

As the debate unfolds, shoppers should watch closely — because decisions made in boardrooms could impact the deals, service, and product selection they find in stores and online.