Macy’s settles proxy fight with activist Arkhouse, adds two directors

Department store Macy’s on Wednesday said it had settled its proxy fight with an activist group led by Arkhouse Management, and that it would add two new directors to its 15-person board.

The reshuffle moves Macy’s closer to a deal that could take the 165-year-old department store private.

Ric Clark, a former executive at Brookfield, and Rick Markee will join Macy’s board effective immediately. Markee is also on the board of discount retailer Five Below. Both Clark and Markee were Arkhouse nominees.

“The Board is open-minded about the best path to create shareholder value,” the company said.

Macy’s shares fell around 2% in pre-market trading Wednesday.

Macy’s also said it had provided the Arkhouse-led investor group with confidential business information as the two sides negotiated the terms of a possible sale. Both new directors will be part of the committee reviewing Arkhouse’s bid to buy the company.

Arkhouse first submitted an offer to take the retailer private in 2023. The investor, which is working in concert with Brigade Management, has since increased its offer multiple times. The investment-firm-turned-activist then launched a proxy fight at the company in February, putting up a nine-director slate.

Clark and Markee’s appointment “will ensure that our discussions continue to be constructive and that our proposal is treated seriously and expeditiously,” Arkhouse managing partners Jonathon Blackwell and Gavriel Kahane said.

The storied retailer has struggled for nearly a decade as consumers have rapidly swung to online shopping and away from department stores. Macy’s said in February it would close around 150 of its roughly 500 stores, just weeks after CEO Tony Spring stepped into the top job.

It has laid off thousands of people in recent years as the company grapples with the dramatically altered landscape.

Macy’s has attracted activist attention before. Starboard Value, a well-established investor in the space, took a position in the retailer in 2015, only to sell it off two years later after a potential acquisition fizzled.

Arkhouse’s bid differs from past engagements at the company. The real estate investor seeks to take the company private, removing it from the rigors of the public market and allowing executives time to streamline and rightsize the business, which still has a significant real estate portfolio.