What Macy's partners are concerned about after rejected bid
01/23/2024 02:12
Macy's (M) rejected a $5.8 billion offer from investment firms Arkhouse Management and Brigade Capital Management, on the grounds that the they "failed to provide evidence of a viable financing plan." With Macy's future uncertain, questions around what sort of impacts this move will have for the rest of its business and relationships with other businesses, arise. Jan Kniffen, J Rogers Kniffen WorldWide CEO, joins the Live show with Yahoo Finance Reporter Brooke DiPalma to discuss Macy's rejection of a buyout offer and the impact it will have on its wholesale partners. Kniffen affirms: "Their concern is that Macy's continues an ongoing operating company, that continues to do what it has been doing, because they'll continue to sell Macy's, that's not going to be the issue. They want to make sure there's plenty of stores there to drive that product out... What they wouldn't want to see is a Sears event. It gets bought out and then everything goes away. They don't want to see that. They don't have other places to go with it." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino
Macy's (M) rejected a $5.8 billion offer from investment firms Arkhouse Management and Brigade Capital Management, on the grounds that the they "failed to provide evidence of a viable financing plan." With Macy's future uncertain, questions around what sort of impacts this move will have for the rest of its business and relationships with other businesses, arise.
Jan Kniffen, J Rogers Kniffen WorldWide CEO, joins the Live show with Yahoo Finance Reporter Brooke DiPalma to discuss Macy's rejection of a buyout offer and the impact it will have on its wholesale partners.
Kniffen affirms: "Their concern is that Macy's continues an ongoing operating company, that continues to do what it has been doing, because they'll continue to sell Macy's, that's not going to be the issue. They want to make sure there's plenty of stores there to drive that product out... What they wouldn't want to see is a Sears event. It gets bought out and then everything goes away. They don't want to see that. They don't have other places to go with it."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
BRAD SMITH: Jan, what are some of the wholesale partners that Macy's works with, what are they to think as all of this plays out?
JAN KNIFFEN: Well, they'll be very concerned, of course. But their concern is that this Macy's continue as an ongoing operating company that continues to do what it's been doing. Because they'll continue to sell to Macy's. That's not going to be the issue. And they want to make sure there's plenty of stores there to drive that product out because they've had relationships with Macy's forever. So I'm sure they're watching it very carefully.
What they wouldn't want to see is a Sears event, right? It gets bought out, and then everything goes away. They don't want to see that. They don't have other places to go with it. Remember, Macy's is pretty much last man standing. Dillard's is the only other player of size in the space, and they're a third of the size of Macy's. So it's still very important to the structure of all of the vendors that Macy's is around and continues to do what they're doing.
Back on the other subject, we do think that the real estate has a market value of $8.5 billion. And that's basically what's on the table. These guys have ponied up equity, theoretically, plus the debt they would assume and the total together is about $8.6 billion. So it kind of means the rest of Macy's comes as a gift with purchase if you really believe that the real estate itself is worth $8.5 billion.