Macy’s rallies over activist pressure to spin off online unit

Macy’s shares surged as much 18% today as investors imagine what a spinoff of the…

Macy’s shares surged as much 18% today as investors imagine what a spinoff of the department store’s e-commerce business could mean. The department store company faces activist pressure to separate its online unit, mirroring its rival’s recent strategy. 

Monday’s rally came after Dow Jones reported Sax Fifth Avenue plans to seek a $6 billion valuation for an IPO of its online business. Earlier this year, the upscale department store announced it would separate its brick-and-mortar stores from its e-commerce business as consumers increasingly shop online for luxury goods. 

Activist hedge fund Jana Partners reportedly wants Macy’s to follow a similar path. Buying online has accelerated over the last year and half as brick-and-mortar shops had to temporarily close during the pandemic. 

Macy’s market cap currently sits at $8.7 billion. Shares of the department store have risen 150% this year. 

Yahoo Finance reached out to Macy’s for a response, and the company said it did not have a comment to share. 

During the company’s second-quarter earnings call, the company laid out plans to increase spending over the next couple of years to strengthen its omni-channel capabilities. It plans to invest in digital shopping, data and analytics, technology infrastructure, and fulfillment capabilities.

“To me, it is clear that a comprehensive retail ecosystem with physical stores in the best malls and the most productive off-mall locations integrated with the best-in-class e-commerce offering is a powerful combination and is moving us forward as a strong digitally led omni-channel business,” said CEO Jeff Gennette during the earnings call. 

Shares of other retailers also rallied on Monday. Nordstrom (JWN) was up more than 4%, while Kohl’s (KSS) increased about 2%. 

Editor’s note: This article was updated to include a response from Macy’s.

All Markets Summit

All Markets Summit

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn