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ctivist investor Barington Capital, which has taken aim at struggling department store Macy's, is urging the company to slash spending and explore selling its luxury brands. The push marks the fourth activist effort at Macy's in a decade, with shares rising around 3% on the news.

    Barington has partnered with private equity firm Thor Equities to pressure Macy's into cutting inventory and sales costs, as well as reviewing its real estate portfolio. According to Barington's presentation, management has chosen to spend nearly $10 billion on capital expenditures while neglecting buybacks or dividends.

    Macy's shares have underperformed the S&P 500 and Retail Select indexes over the last decade, with the company announcing plans to close around a third of its namesake stores by early 2027. Barington wants Macy's to boost share buybacks and consider selling off its Bluemercury and Bloomingdale's brands.

    The activist investor also believes Macy's should reassess its real estate portfolio, valuing it at between $5 billion and $9 billion. Barington suggests creating a separate subsidiary to manage these assets, which could charge rent to the parent company while assessing how to maximize value.

    Barington pointed to smaller department store operator Dillard's as an example of effective capital allocation, with a market cap over $7 billion and 273 stores in the US. Macy's has become an activist target again due to declining sales at its namesake stores and ongoing closures.

    In the most recent quarter, Macy's reported a 2.4% decline in sales to $4.74 billion, with comparable sales falling 1.3%. The company is also investigating after discovering an employee intentionally hid up to $154 million in delivery expenses on its accounting books for nearly three years.

    Selling real estate as Macy's closes stores could free up cash for the business, which owns many of its mall-anchor stores but has not disclosed which locations have been sold. Barington has a history of mounting campaigns at big consumer names, including Mattel and Steve Madden.