J
oseph Sitt's Thor Equities and Barington Capital Group are pushing for a turnaround at Macy's, with a plan to boost the retailer's sagging stock. The investors, seeking seats on the board, propose creating a separate real estate unit and spinning off top chains Bloomingdale's and Bluemercury. They also suggest cutting spending to 1.5-2% of sales and buying back up to $3 billion in stock over three years.

    The group estimates Macy's real estate portfolio is worth around $9 billion, and suggests forming a subsidiary to control owned and leased properties, with the retailer paying rent. Sitt notes that Macy's flagship store in Herald Square may be too large, prompting bad decisions, and could potentially be rented out instead.

    Macy's has expressed confidence in its strategy but is open to engaging with the investors. The company plans to proceed with shutting underperforming stores, cutting costs, and opening more locations for Bloomingdale's and Bluemercury. This marks the second attempt by activist investors to target Macy's real estate potential, following a failed takeover bid from Arkhouse Management and Brigade Capital Management in July.

    Macy's is set to announce its third-quarter earnings on Wednesday, with its stock price down 15.4% year-to-date at $16.72.