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.

Learn more:

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.

When Macy’s unveiled a new turnaround plan on Tuesday, it came along with a collective sense of deja vu.

The American department store chain is set to close 150 stores by 2026, bringing its total down to 350 — nearly half of the 650 locations it operated just five years ago. The hope is that shuttering those unproductive stores will allow the retailer to allocate more than $500 million in savings toward more promising areas of improvement, such as small-format stores and online-offline customer service.

But Macy’s has been shuttering unprofitable locations for years, well before new CEO Tony Spring unveiled what the retailer has dubbed as its “Bold New Chapter” strategy. As Bloomberg columnist Leticia Miranda noted this week, former Macy’s chief executive Jeff Gennette embarked on not just one, but two nearly identical store optimisation initiatives in his six-year tenure, which ended at the start of this year. And in closing stores, Macy’s is arguably further diminishing its presence in the lives of American consumers, which could ultimately be its death knell. The same trajectory pushed Sears and J.C. Penney into bankruptcy and liquidation.

If Spring were to succeed where his predecessor couldn’t — his modest objective is to deliver low single-digit in-store sales growth by 2025 and increase cash flow to pre-pandemic levels — it will come down to execution rather than direction, analysts said.

In addition to scaling back retail, Spring’s plan includes growing a fleet of small-format Macy’s stores; consolidating the merchandising team to bring together owned and licensed brands; continuing to tighten and improve private labels and refining the e-commerce experience. Macy’s will also expand its premium segment with 15 new Bloomgindale’s locations and 30 new Bluemercury stores.

Profitability, product improvements and backend efficiencies are perennial concerns for any fashion retailer; for Macy’s to finally pull off a turnaround, Spring’s proposed actions must result in a palpable difference to the customer experience — and fast. Its waning relevance among shoppers, after all, is its greatest dilemma.

“What exactly is different this time? I think this round is hopefully informed with more technical data around traffic patterns, and there’s already a big effort underway with product improvements and private label,” said Oliver Chen, retail analyst at TD Cowen.

Even so, Chen downgraded Macy’s in a note published Thursday morning, highlighting the chain’s lack of revenue growth in recent quarters despite overall consumer resilience in the US.

Other industry experts are even more sceptical of Macy’s prospects, citing the decline of the department store model that relies on promotions and commodified merchandise. Even the biggest big box store can’t compete with the endless aisles of e-commerce, and no American retailer can offer prices as low as Temu or Shein — not even Amazon.

“For Macy’s, the time for a bold move was four, five years ago,” said Doug Stephens, retail consultant and author. “At this point, they’re rearranging deck chairs on the Titanic.”

Still, it’s not too late for Macy’s to instil a little more “theatre” to its stores, according to Michael Brown, partner in Kearney’s consumer products and retail practice. Stephens recommends shifting the focus from selling product to hosting experiences like parties or panel discussions. Fashion shows and sharp merchandising were what made department stores so glamorous in the 1970s and 1980s, Brown added.

“Department stores have to be reinvigorated with experiences that make consumers come out and shop,” he said.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Shein considers London IPO amid US resistance to listing. The company would need to file a new overseas listing application with Chinese regulators if it decided to switch to London or elsewhere. Other venues including Hong Kong or Singapore may also be considered.

Warby Parker continues stable growth and store expansions. Revenue for 2023 rose 12 percent year over year to $670 million. The brand increased store count to 237 during the year, up from 200 at the end of 2022.

Birkenstock posts strong earnings with sandal demand growing. Adjusted earnings were €81 million ($88 million) before interest, taxes, depreciation and amortisation in the quarter ending in December. Revenue in the quarter reached €303 million, higher than the €285 million average estimate.

Puma sees sneaker demand picking up in the second half of the year. The company expects to gain more momentum as it introduces new products and implements a revival plan. Puma shares rose as much as 3.9 percent in early trading before paring gains.

Mercado Libre slumps most in two years on profit shortfall. Shares slumped 13 percent Friday, the worst intraday drop since May 2022, after the company reported earnings per share of $3.25. The company posted full year net revenue of around $14.5 billion and net income of $1.2 billion for the year.

The RealReal reaches EBITDA profitability. The resale platform saw revenue drop 10 percent in the fourth quarter of 2023, but met its profitability benchmark by prioritising consignment margins.

EBay reports strong holiday quarter and expands buyback plan. Fourth-quarter profit was $1.07 a share on sales of $2.56 billion. The shares rose about 4 percent in extended trading after closing at $44.39 in New York. The stock has increased 1.8 percent this year.

Inditex to gradually reopen stores in Ukraine. The company plans to reopen its first 20 stores in Ukraine, three of them under the Zara brand, and resume online sales. Inditex cited improved local market circumstances as reason for the reopenings.

Moncler CEO Ruffini will hold 16 percent of shares after Rivetti family invests directly. The Rivetti family, who founded Stone Island, will become a direct shareholder in the luxury group after ending an investment agreement with Ruffini’s holding company Double R. Carlo Rivetti will remain a Moncler board member and chairman of Stone Island.

Adidas is dropping a new batch of controversial Yeezy shoes on digital channels. The sportswear company looks to boost earnings by working through the backlog of footwear from its cancelled partnership with Ye. The products will be released in phases over the coming weeks.

Rowing Blazers acquired by Burch Creative Capital. The deal will inject new capital into the New York-based preppy streetwear brand. This will allow it to expand its womenswear assortment and move into a larger Manhattan flagship.

Renewcell files for bankruptcy. The Swedish textile recycler said it was unable to secure sufficient long-term funds to continue operations. The situation marks a blow to efforts to introduce new, more sustainable materials to the market at scale.

EU states block supply chain due diligence law. The stalling of the law designed to clean up corporate supply chains drew condemnation from climate and human-rights activists. The opposing countries cited concerns over how such a law would affect the competitiveness of European businesses.

Sustainable Apparel Coalition rebrands as Cascale. The move distances the organisation from a greenwashing scandal focused on its Higg sustainability tools. The rebrand also indicates ambitions to expand beyond fashion.

Investment in next-gen materials rebounded to $500 million in 2023. The figure is up nearly 10 percent from a year before. Investors funnelled more money into the space despite a wider slump that saw venture capital funding fall 42 percent and deal count decline 30 percent.

THE BUSINESS OF BEAUTY

British fashion chain Next is in talks to acquire The Body Shop assets. Any sale, however, would not include The Body Shop’s most recognisable assets. The news follows announcements of The Body Shop shuttering 75 stores across the UK.

Bath & Body Works projects downbeat full year sales and profit on slowing demand. Shares were down 9 percent in pre-market trading. The beauty and skincare firm expects 2024 annual net sales to range between a decline of 3 percent to flat.

US FDA chief is very concerned about fake weight loss drugs. Demand for weight loss drugs is far outpacing supply with some analysts forecasting the market for weight-loss drugs could reach $100 billion a year by the end of the decade. Earlier this month, the FDA sent warning letters to two online vendors for selling unapproved and misbranded versions of semaglutide and tirzepatide.

Supergoop names Lisa Sequino as new CEO. Most recently, Sequino was CEO at Jennifer Lopez’s skincare brand JLo Beauty. Sequino takes the helm after former CEO Amanda Baldwin joined Olaplex late last year.

Estée Lauder announces collaboration with Sabyasachi on a collection of 10 lipsticks. The partnership is part of the conglomerate’s larger strategy to capture the Indian market. It also marks Sabyasachi’s first foray into beauty.

MEDIA AND TECHNOLOGY

Vogue World to kick off Couture Week with Olympics tribute. The production will take place on June 23 on Place Vendôme. It will feature fashion content overseen by editor Carine Roitfeld, Off-White designer Ibrahim Kamara and fashion historian Alexandre Samson.

LVMH in exclusive talks with Lagardere for Paris Match magazine. A sale would expand the media assets of LVMH CEO Bernard Arnault, which include French business daily Les Echos and national newspaper Le Parisien.

Samsung to unveil wearable smart ring at World Mobile Congress. The South Korean company will publicly display the Galaxy Ring for the first time after teasing it last month. The Galaxy Ring’s official launch is expected later in 2024.

Compiled by Yola Mzizi.