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appy Wednesday, Retail readers. Today's Thought Bubble explores the latest activist campaign at Macy's, led by seasoned retail investors Barington Capital and Thor Equities.

    Barington and Thor may be just what Macy's needs to shake things up. Both have a proven track record in extracting value from struggling retailers. They're proposing a bold plan: creating a separate subsidiary to evaluate Macy's real estate, estimated to be worth $5 billion to $9 billion.

    Their strategy involves cutting costs at the location level by reducing remodeling expenses or rebuilding stores for less. They also suggest renting out large spaces to other tenants, rather than filling them with merchandise. Barington sees its turnaround of Dillard's as a model for Macy's success, citing reduced capital expenditures and returned capital to shareholders.

    While acknowledging Macy's new CEO has a promising strategy in place, Barington believes it's not enough to unlock shareholder value. They're pushing for a change in capital allocation strategy. This is the second activist challenge this year, following a $6.9 billion take-private offer that was rejected earlier in 2022.