Macy's in talks for real estate deals, sales fall less than feared
By Sruthi Ramakrishnan
(Reuters) - Macy's Inc's (M.N: Quote) sales fell less than expected for the first time in four quarters, helped by a last-minute blast of cold weather in January, and the department store operator said there was a "high degree" of interest among parties it approached for real estate deals.
The retailer's sales have fallen the past year as a strong dollar hurt tourist spending at its Bloomingdale's and flagship Macy's stores, and as consumers preferred to spend on big-ticket items such as automobiles and homes rather than on apparel.
Added to that, shareholder Starboard Value LP has been pressuring Macy's since July to monetize its real estate assets, which the hedge fund estimates at about $21 billion.
Macy's has been trying to fight both battles, by selling some real estate assets, closing stores and cutting jobs to lower costs, and opening off-price stores, called Backstage, and boosting its online presence to power sales.
The company's sales fell a smaller-than-expected 5.3 percent in the holiday quarter, while a lower store count and cost-cutting measures helped it forecast 2016 earnings largely above analysts' estimates.
Macy's shares were up nearly 5 percent at $43.08 midday on Tuesday, amid a decline in the broader market .SPX.
But Macy's is not done.
It said on Tuesday it plans to test the off-price stores within 15 Macy's stores, rather than as standalone stores, this year. Continued...