THE WHAT? Macy’s has announced the hiring of consultant firm AlixPartners to look into the spin off of its e-commerce operations, however, CEO Jeff Gennette has stated that the company has not reached any predetermined conclusions.
THE DETAILS The U.S. retailer is said to be looking at whether it made sense to split its digital business from its physical stores, with the consultancy firm helping to examine the structure of the business.
Speaking in an interview with CNBC, Gennette stated, “The board, myself, our advisors, we look at this all the time, and we look at how is the company more valuable to the shareholder — as a unified company or has separate companies?”
AlixPartners is set to ‘pressure test’ the retailer’s analysis of its structure, which is an ongoing process.
Gennette continued, “We don’t have any conclusions, but we’ll be transparent with the market about where those findings take us.”
THE WHY? The move comes amidst pressure from activist investor Jana Partners to split the e-commerce operations and spin it into a standalone firm that could fetch a higher market valuation.
According to the WSJ, Jana Partners sent a letter to the company board in October, with the company Founder and Managing Partner Barry Rosenstein stating, “We appreciate Macy’s strong execution in the quarter and commend the board for promptly engaging advisers to undertake a review of ways to unlock the value of its strong e-commerce business.”
Gennette said, “At the end of the day, I think what everybody can agree on is the omnichannel behavior of the customer. That customer is going to be respected at all costs.”