Macy’s shares jumped 16 percent before the bell on Monday after investors Arkhouse Management and Brigade Capital sweetened their take-private bid over the weekend, valuing the US department store operator at $6.58 billion.

They raised the offer price to $24 per share for the remaining stake that they do not own from $21 per share. The retailer’s shares, which had lost 10 percent last year, rose to $21 following the latest bid.

“We remain open to increasing the purchase price further subject to the customary due diligence,” Arkhouse had said on Sunday.

Macy’s is yet to open its books to the bidders as it was reviewing the new offer after rejecting in January a prior bid from Arkhouse on concerns around deal financing and valuation.

The real estate-focused investing firm has now said it has identified global lenders who will commit to financing the deal if due diligence was granted.

“Macy’s should cooperate with the investment group and pursue a possible sale. If it refuses to do so, it runs the risk of a hostile takeover,” said David Swartz, an analyst with Morningstar Research.

The company has struggled to maintain its sales growth and profitability amid competition from cheaper physical and e-commerce offerings and a value-based shopping pattern due to elevated inflation and higher borrowing costs.

It last week unveiled a turnaround plan that included cutting store counts and job roles, while aiming to revive sales at its luxury labels Bloomingdale’s and Bluemercury by improving merchandise and adding more staff.

Arkhouse, which has an economic exposure of 4.4 percent to Macy’s along with its affiliates, has piled pressure by nominating nine director candidates with retail, real estate and capital markets experience to the company’s 14-member board.

Macy’s forward price-to-earnings multiple, a common measure for valuing stocks, is 6.73, lower than industry peers, including Kohl’s and Nordstrom that have a P/E ratio of 10.36 and 10.28, respectively.

By Savyata Mishra; Editing by Arun Koyyur

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Activist Investors Raise Macy’s Buyout Bid to $6.6 Billion

Investment firms Arkhouse Management and Brigade Capital Management is offering to acquire Macy’s stock they don’t already own for $24 per share, 14 percent above its previous offer from December.

Arkhouse Management, a real-estate-focused investing firm said on Sunday it and Brigade Capital Management have raised their offer for Macy’s after the department store chain rebuffed their prior proposal as too low.

The firms are now offering to acquire Macy’s stock they don’t already own for $24 per share, about 14% more than its previous offer of $21 per share.

The new offer for the company represents a premium of about 33% to its last close on Friday at $18.01 and values the company at $6.6 billion.

“We continue to offer the company an attractive alternative solution through a sale of the company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity,” Arkhouse said.

“The Macy’s Inc Board will carefully review and evaluate the latest proposal,” Macy’s said in a separate statement.

The two investment firms had submitted a proposal in December last year to acquire the shares of Macy’s they don’t already own for $21 a share but the offer was rejected by the department store operator due to concerns over the deal’s financing and valuation.

Like other legacy department store operators, Macy’s has struggled to compete against younger, online competitors or peers with smaller brick-and-mortar footprints. This has given Arkhouse and Brigade an opening to put pressure on Macy’s to explore a sale.

Macy’s is also facing a board challenge from Arkhouse Management after the investment firm nominated nine director candidates including executives with retail, real estate and capital markets experience, to the department store’s 14-member board last month.

By Akanksha Khushi in Bengaluru; editor: Mark Porter and Lincoln Feast.

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Is Macy’s ‘Bold New Chapter’ Bold Enough?

New CEO Tony Spring’s plan to shutter stores and improve products echoes previous efforts for revitalisation. To pull it off this time, the retailer must deliver transformational changes in the shopping experience.

PARIS — The Balenciaga invitation arrived with a QR code which activated two hours before showtime on Sunday. It was a voicemail from Demna in which he recited a manifesto. Key point: if luxury is defined by rareness, then creativity, which is also rare, must be a new form of luxury. Hard not to think of that when we walked into the show venue, a massive tent at Les Invalides, to be seated under a ceiling of blue sky, with sunshine casting shadow across walls panelled with concrete. It was just an electronic illusion, of course, but, for one magic moment, spirits soared, after two weeks of constant rain and lowering skies in Milan and Paris. Is that the power of AI? The concrete panels subsequently yielded during the show to visions of glorious fields, mountains and streams, which transitioned to the neon frenzy of a city by night, a frantic hellscape of TikTokers, a bleached-out forest of pixels, and, finally, a blizzard of static. An overload of content. All life gone.

Demna is drawn to dystopia. His designs elevate a grab-bag of what’s left after nothing. “Fashion on the edge,” he called it during a preview which was such a fluid, articulate performance it was more the art of the preview.  “If it’s not on the edge, it’s a scam.” And yet he was in an exceptionally good mood. Over the past year, he’s managed to purge toxicity from his life. The pre-fall show in Los Angeles in December was a ray of light for him after the relentless threat of cancellation following the accusations of the previous year. LA was a parade of Balenciaga’s greatest bits, all linear, no lateral, but it clicked Demna back into gear, and allowed him to have a lot of fun with his latest.

He loves the old upside down and started the show with the traditional finale of evening wear. A hand-embroidered gown featured a hipline built out with shoulder pads. “Hip-aulettes,” he called them. “What’s good taste or bad taste?” he wondered, before deciding there’s no such thing and sending a full-length faux fur coat with matching skirt down the runway. They’d been treated with resin to give them an aged, not particularly appealing look. That’s one of Demna’s most winning traits. He doesn’t really care if something looks “good,” which frees him up to make things look “interesting.” Like the dress composed of three shirts stacked one on top of the other, with the sleeves knotted round the waist. Or his update of Cristóbal Balenciaga’s “La Vareuse,” flipping a pair of jeans upside down so that the crotch became the collar, and the legs became the sleeves.  Demna’s personal favourite was a long dress made up of four t-shirts laid vertically and stitched together. It was ingenious upcycling but it was also typically perverse in its combination of t-shirt messages. True, the irony of Demna’s ideas occasionally touches on mockery.

Much less bamboozling was the fluid, structureless tailoring in viscose – jacket, pants, shirt and tie. “It’s a difficult thing to modernise,” Demna said. “But I want to see people under 30 wearing a suit.” The shoe he suggested as an accessory was Wicked-Witch-pointy. It also folded so it could fit in your pocket if necessary.  Balenciaga covers all bases.

The models chewed gum and had tattoos and rings through their noses, when they weren’t Isabeli Fontana, Maggie Rizer, Esther Cañadas and Tasha Tilberg, supermodels on the comeback trail. They wore dresses collaged from bras, hoodies and knapsacks, or outfits tightly sellotaped to the body. Demna hates hats but he offered the new Balenciaga beanie, which pulled all the way down over the eyes,“to protect yourself from an avalanche of content.” The star of the accessories was something he called a “bag with attitude,” a huge, Birkin-like thing. “Balenciaga has no logo,” Demna explained. “It’s a word with many letters that I cannot fit on a bag. So I have to put an attitude into it to make it identifiable.” There was also a face-wrapping visor, quite fabulous bar the slightly impaired vision, and already locked up in pre-orders.

Which begged the question: how do people actually feel about Balenciaga now? There has certainly been no diminution in the creativity or the ironic wit. There’s still the odd frisson that comes from someone being allowed to get away with all this under the august name of fashion’s greatest designer, paid for by a huge fashion conglomerate to boot. And yet I’m kind of wondering, what more can Demna do to win back the love? Is he wondering too? It’s that blizzard of static that stayed with me.

Balenciaga Autumn/Winter 2024

PARIS — Seán McGirr’s debut show at Alexander McQueen, one of the season’s most anticipated shows, was inevitably one of its most controversial, because Lee McQueen himself was the biggest most of all: the most significant designer of modern times. Since his death in 2010, his legacy has been nurtured and enhanced by his right hand Sarah Burton who has made the brand a byword for exquisite craft. As the first “outsider” to be unleashed on that legacy, 35-year-old McGirr was confronted with a formidable task that may be thankless, initially at least, if the fury of Saturday night’s keyboard warriors is any gauge. He seemed to be anticipating as much in a preview last week when he quoted Lee’s own response to criticism: “I’d rather people hated what I do than not give a shit about it.” But, taking a longer, more rational view, McGirr’s debut pretty much realised his own ambition, which was to bring McQueen back to its raw urban roots, when Lee was still mastering his craft, before all the spectacles, when the extravagance was still purely emotional.

The location — a cold, damp, concrete husk of a building almost an hour’s drive from the centre of Paris — certainly set the tone there. So did McGirr’s moodboard, with its images of McQueen’s earliest shows “Banshee” and “The Birds.” A piece from the latter — the famous clingfilm dress — was the starting point. “What was Lee trying to say?” McGirr wondered. The twisted simplicity of the look, its “compression,” registered with him as something ineffably modern and new. So he opened the show with his own version, a fitted, draped tube of laminated jersey. Garbage bag rather than clingfilm.

McGirr was entranced by McQueen’s smash’n’grab iconoclasm, the way, for instance, he ran dirty old tires over the tailoring in “The Birds” to break it down. His response to that was a T-shirt and a dress built round smashed windshields from a car dealership in Dagenham. Another dress of broken crystal featured a hectic effect created by the incorporation of shattered tail lights. There were also skirts and shirts cut from a black silk nylon that was intended to duplicate tarpaulin. Improvising with industrial detritus, with found objects, felt “very London” to McGirr. For one look, he found an old mesh toile from the 90s that had never been used and “trapped” it in layers of tulle.

McGirr never met McQueen, but he has an instinct for his ghosts. The urgency of the models reminded me a bit of Laura DePalma, whose fierce, confrontational walk in those early shows was an unforgettable extension of Lee’s own attitude. There was an echo of an East End gangster or two in the men’s broad-shouldered leather coats, tightly bound (more “compression” at the waist, with broad-brimmed hats. The attenuated tailoring also harked back to Lee’s own obsession with razor-sharp precision, though McGirr developed his own stacked (even more “compression”) shoulder.  The fact that the razor was a little on the blunt side here drove the naysayers into a frenzy, but that’s the kind of kink that McGirr should be able to work out with time.

Speaking of kink — integral to the McQueen aesthetic — McGirr brought fetishistic flourishes of his own. There was a sling link in a necklace and a bag handle. Biceps were compressed by metal cuffs designed by Lee’s jeweller Shaun Leane, hoof-like footwear sprouted mini-horse’s tails. Closest to the core of peculiarity were the looks that closed the show. His father is a mechanic in Ireland so there was a lot of car talk around the house when McGirr was growing up.  He created three metal dresses in black, Aston Martin yellow and Lamborghini blue. Cars this time, instead of car tires: McQueen via J.G. Ballard. Though there were no skulls, no tartan, no courting of the clichés, the notorious bumster trousers got a revamp in the shapely form of a couple of “bum” dresses, which sculpted  the rear end of Michelangelo’s David from shearling and tufted wool and mounted it on tulle and a rib-knit jumper.

Lee McQueen was one of the late, legendary Professor Louise Wilson’s star students at Central Saint Martins. Sean McGirr was one of her students in the last year she taught at CSM. I thought of her when he marched out his massive cocoons of knitwear, ten tonnes of hoodie, played down by pairing with grey flannel trackies or a denim skirt. They perfectly embodied “the rough drama” that McGirr craved.  It was a key element of Lee’s own beginnings, and if that suggests a fundamental compatibility, I’m happy. Because the connection truly is there, if those keyboard warriors care to step back from their fashion politicking and give the new standard bearer a chance.

Alexander McQueen Autumn/Winter 2024

Some of the biggest mass fashion retailers report their fourth-quarter results this week (most luxury brands took their turn around the start of the month). We already know that holiday sales were stronger-than-expected at high-flying retailers like Abercrombie & Fitch and American Eagle; less so at struggling competitors. And after last week’s big shakeup at Macy’s, could other retailers be looking to make some major changes too?

Abercrombie & Fitch: How Long Can They Keep This Up?

Seriously, how are they doing it? The company, which was lumped in with Gap and other struggling mall brands not all that long ago, is on fire. In what was expected to be a weak holiday season for most retailers, sales grew in the mid-teens. The secret to Abercrombie’s success is basically just retail 101: figure out what your customers want, and sell it in just the right amount. The company’s stock, the best performing of any large US company last year, has continued to rise in 2024. Nothing lasts forever, but there aren’t any signs the party is winding down yet.

Speaking of brands that keep moving from high to high: Fellow mall rat American Eagle, which also had a blowout holiday season, reports Thursday. If your taste in red-hot brands run more luxe, Prada reports Thursday (and Miu Miu shows in Paris on Tuesday).

Foot Locker: But Also, Nike

The footwear seller has historically served as a de facto Nike showroom, with the sneaker brand representing about two-thirds of annual sales (and that’s actually down from recent years). Nike was mentioned 21 times in Foot Locker’s last earnings call (it’s a bit of a one-sided relationship; the retailer didn’t come up once when Nike executives last spoke to analysts). The symbiotic arrangement can make Foot Locker a good indicator for where Nike is headed; which shoes it sends to third-party retailers, and in what quantities, says a lot about thinking in Beaverton. This go-round is especially relevant, given Nike’s recent troubles, and the rapidly shifting landscape in the basketball category, a Foot Locker specialty.

Gap: Turning Around or in Traction?

We are starting to catch glimpses of what the Richard Dickson era at Gap will look like. Zac Posen’s appointment as creative director raised eyebrows (whether in excitement or confusion, you decide). Last week saw the debut of a new ad starring Tyla, a Grammy Award-winning, TikTok-viral South African musician who has never fronted a major fashion campaign that evokes that khaki commercial. A nostalgia-flecked brand remix certainly worked for Barbie, but comebacks in fashion are harder than in children’s toys. Then again, a Gap campaign that isn’t ignored or ruthlessly mocked counts as a victory these days, right?

Speaking of turnarounds, Victoria’s Secret reports results on Wednesday. The lingerie giant is something of a cautionary tale for Gap; the brand is edging away from its 2022 makeover, which failed to resonate with consumers.

Nordstrom: What Is the Future for Department Stores?

Last week, Macy’s new CEO announced that the chain would close 150 department stores and invest more in its luxury-focused Bloomingdale’s locations, a drastic move aimed at ensuring the company could survive an assault from activist investors, as well as the wider retail apocalypse. Nordstrom’s product mix is closer to Bloomingdale’s than Macy’s, but it faces many of the same problems, including declining foot traffic in some malls and shrinking margins in the always tough wholesale business. The company has dabbled in fixes ranging from small-format stores to closing unprofitable businesses (RIP Nordstrom Canada), and the closure of Macy’s stores may send some customers to rival department stores. But if things don’t turn around soon, the company may need to contemplate some drastic moves of its own, or risk becoming another activist investor target.

What Else to Watch for This Week

Sunday

Paris Fashion Week: Balenciaga, Valentino, Mugler

Monday

Paris Fashion Week: Stella McCartney, Zimmermann, Marine Serre, Sacai, Pierre Cardin, Coperni

Stitch Fix, Thredup report results

Tuesday

Paris Fashion Week: Chanel, Kiko Kostadinov, Miu Miu, Lacoste, Louis Vuitton

Oddity Tech, Ross Stores, Nordstrom report results

Wednesday

Foot Locker, Abercrombie & Fitch, Victoria’s Secret, The Honest Company report results

Thursday

Hugo Boss, Burlington, Prada, American Eagle, Gap report results

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.