Jana Partners LLC, an activist investment firm founded by hedge fund executive Barry Rosenstein, has taken a stake in $Macy's(M.US)$ and has called on the company's leadership to spin off its e-commerce operations.
What Happened:
The Wall Street Journal, citing unnamed “people familiar with the matter,” said Jana sent a letter to the company's board calling on the department store chain to separate from its online unit, which generates approximately $8 billion in revenue. Jana argued that a separate e-commerce business would be worth a multiple of Macy's current market value, which is approximately $7 billion.
Neither Macy's nor Jana publicly commented on the story, which did not detail the parameters of Jana’s acquired stake.
What's Next:
Jana's advice appears to contradict the observations offered by Macy's CEO Jeff Gennette during a conference last month that noted nearly 70% of Macy’s customers shop through multiple platforms and aren't focused solely on brick-and-mortar or e-commerce.
“We just believe that stores and mobile and our website are just stronger together than anyone is alone,” he said, adding that the company's digital sales are expected to reach $10 billion within three years.
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