Macy's Receives Buyout Offer, and Real Estate Assets are the Target

Macy's, a prominent department store in the United States, is at the center of a $5.8 billion purchase offer by investment groups Arkhouse Management and Brigade Capital Management. However, the interest seems to extend beyond the retailer's business, with sources indicating that the billion-dollar offers primarily focus on Macy's real estate assets. 

Currently, Macy's owns more than 300 of its 783 stores, including Bloomingdale's and beauty stores Bluemercury. Additionally, it has 102 locations where it owns the land, leased for other purposes. U.S. companies estimate that the value of Macy's real estate assets exceeds $6 billion, surpassing its market capitalization of approximately $4.8 billion. 

The value is noteworthy as department stores in the U.S. face a challenging period, with major names such as JCPenney, Neiman Marcus, and Lord & Taylor declaring bankruptcy. Macy's, on the other hand, reported a profit of $1.2 billion with revenue of $24.4 billion in the last fiscal year. 

In Brazil, data from SiiLA's GROCS indicates that the sales volume in department stores in Brazilian malls is surpassing pre-pandemic levels. In the third quarter of 2019, sales for Class B developments were R$932/m², and for Class C, R$1,055/m². In 3Q 2023, these numbers increased to R$1,094 and R$1,345, respectively. 

 "The Brazilian culture involves strolling in malls, having a leisure moment. These assets provide security, comfort, and attractions for the whole family, and that's why malls continue to perform well here. Nevertheless, as we have observed, shopping is becoming less prominent in this mall activity, giving way to services and entertainment. However, stores will still be there, ultimately benefiting from the increased foot traffic of people going to malls for the gym, groceries, hairdressing, among other services," comments SiiLA CEO, Giancarlo Nicastro.