Macy’s, Inc. M, a retail giant, is reportedly undergoing a significant operational restructuring that will cut staff significantly. This shift in strategy marks a 46% decline in workforce from 2013 to 2023, reflecting the changing nature of retail.
The reduction appears to be influenced by an investor consortium led by Arkhouse Management and Brigade Capital advocating for privatization. The recent call for a $5.8 billion buyout offer fervently desires a leaner, more efficient Macy’s.
Tony Spring, the incoming CEO, seems poised to focus on slashing costs. Central to these plans is reducing promotions and pivoting towards e-commerce as well as closing several full-line stores to adapt to shifting retail trends.
The significant operational shift at Macy’s is likely to be closely watched by investors and analysts due to its potential impact on the company’s financial standing and competitive position in the fluctuating retail landscape. The management is also revamping private-label brands, considering smaller format stores, and leveraging its subsidiaries to drive growth.
Image Source: Zacks Investment Research
Shares of the Zacks Rank #3 (Hold) company have increased by 9.8% in the past six months compared with the industry’s growth of 10.8%. The Zacks Consensus Estimate for sales and EPS suggests a decline of 5.1% and 32.8%, respectively, for the current fiscal year.
Alternatives to Consider
Ross Stores ROST and Target TGT are enterprises to watch. Both companies have shown growth potential, presenting themselves as alternatives in the retail sector.
Amazon.com AMZN, an e-commerce leader, also offers substantial market growth. Its Zacks Rank #2 (Buy) and consistent earnings are indicative of an upward trajectory in the sector.