Macy’s could get takeover bid from buyout firm Sycamore Partners

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By Dan Sears

Private-equity giant Sycamore Partners is exploring a possible bid to buy Macy’s – even as the iconic retail chain this week rejected an unsolicited offer from another bidding group, The Post has learned.

Sycamore — a prolific buyout firm whose retail properties include Ann Taylor, Talbots and the regional department-store chain Belk — has been in quiet talks with Macy’s, which also owns Bloomingdale’s, since at least late December, sources told The Post.

The biggest department store in the US has become a takeover target amid sagging sales and customer traffic at its 722 stores nationwide.

Last week, Macy’s announced 2,300 job cuts, most of them corporate positions.  

The talks also come on the heels of a $5.8 billion buyout offer last month from investment firms Arkhouse Management and Brigade Capital.

Macy’s, which rejected that bid earlier this week, in recent years has attracted takeover attempts from activist investors Starboard Value and Jana Partners, as well as Canada-based rival Hudson’s Bay Co., owner of Saks Fifth Avenue.

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Macy’s has fended off several takeover bids from activist investors and a competitor in recent years. Erik Pendzich/Shutterstock

While Sycamore is not as far along with Macy’s as Arkhouse and Brigade, some retail insiders believe New York-based Sycamore, led by the media-shy dealmaker Stefan Kaluzny, has the savvy and financial backers to pull off a deal.

A spokesperson for Sycamore declined to comment.

“Sycamore makes a lot of sense because they own Belk’s and other apparel brands,” said one top retail executive.

Stefan Kaluzny, who is famously media-shy, heads up Sycamore Partners. Getty Images

“Stefan’s genius from day one is that he bought a sourcing company that is the backbone of every investment he makes,” another retail executive told The Post. “It’s part of his overall secret sauce that he has the ability to cut costs and add margin dollars to any of his investments.” 

That manufacturing and sourcing company is MGF Sourcing, which previously was owned by The Limited. Sycamore took a controlling stake in MGF in 2011.

Elsewhere, Sycamore has focused on distressed retailers, having scooped up brands like Anne Klein, Nine West, Lane Bryant, Torrid and Staples.

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In 2014 it bought Jones Group and sold off its brands Jones New York, Stuart Weitzman, Kurt Geiger and Easy Spirit, according to a Wall Street Journal report. 

At the start of the pandemic, Sycamore Partners almost acquired Victoria’s Secret but backed out of the deal.

This week, the Macy’s board rejected the offer from Arkhouse and Brigade, citing concerns about the investors’ ability to finance the transaction.

In response, Arkhouse and Brigade are weighing a possible hostile bid extended directly to Macy’s shareholders, the firms said in a statement.

Macy’s has rebuffed the most recent takeover offer from Arkhouse Management and Brigade Capital. AP

“Our sincere hope is that they send us an NDA,” referring to a non-disclosure agreement required to begin due diligence on a possible Macy’s buyout, Arkhouse managing partner Gavriel Kahane told Bloomberg on Monday.

Macy’s declined to comment on the Sycamore talks, pointing The Post to its Jan. 21 statement rejecting the Brigade and Arkhouse offer.

“Macy’s isn’t really interested in doing a deal,” said one retail executive with knowledge of the company. “They’ll fight off everything.”

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In a letter to Arkhouse and Brigade, outgoing Macy’s CEO, Jeff Gennette said that their offer “unnecessarily distract(s) our management team as it continues to drive value for shareholders through execution of our business strategy and value creation levers.”

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