Research Calls
- Upgrades:
- Arcos Dorados (ARCO) upgraded to Buy from Neutral at BofA Securities; tgt raised to $10
- British American Tobacco (BTI) upgraded to Overweight from Neutral at JP Morgan
- Buenaventura SA (BVN) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $11.10
- GDS Holdings (GDS) upgraded to Buy from Hold at Deutsche Bank; tgt $55
- Johnson Controls (JCI) upgraded to Buy from Hold at Deutsche Bank; tgt lowered to $79
- Liberty Global (LBTYA) upgraded to Outperform from Neutral at Credit Suisse
- Ping Identity (PING) upgraded to Buy from Hold at Stifel; tgt raised to $30
- Schnitzer Steel (SCHN) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $58
- Transocean (RIG) upgraded to Hold from Sell at Pareto; tgt $5
- Werner Enterprises (WERN) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $46
- Downgrades:
- Alcoa (AA) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $100
- Atlantia SpA (ATASY) downgraded to Neutral from Buy at UBS
- Bilibili (BILI) downgraded to Neutral from Outperform at KGI Securities; tgt $43
- EOG Resources (EOG) downgraded to Hold from Buy at TD Securities; tgt $140
- Intl Flavors (IFF) downgraded to Hold from Buy at Berenberg; tgt lowered to $144
- Leidos (LDOS) downgraded to Equal Weight from Overweight at Wells Fargo; tgt raised to $113v
- NetApp (NTAP) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $96
- PaySign (PAYS) downgraded to Neutral from Buy at Ladenburg Thalmann
- Post (POST) downgraded to Hold from Buy at Truist; tgt lowered to $70
- Southern Copper (SCCO) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt raised to $63
- Traeger (COOK) downgraded to Hold from Buy at Jefferies; tgt lowered to $7
- Traeger (COOK) downgraded to Hold from Buy at Stifel; tgt $7.50
- Vale S.A. (VALE) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $22
- Others:
- Atlantica Yield (AY) initiated with a Neutral at JP Morgan; tgt $40
- Capital One (COF) assumed with a Buy at Citigroup; tgt raised to $189
- Ciena (CIEN) initiated with a Buy at Rosenblatt; tgt $80
- Citizens Financial Group (CFG) assumed with a Buy at Citigroup
- Comerica (CMA) assumed with a Buy at Citigroup
- Fifth Third (FITB) assumed with a Neutral at Citigroup
- Infinera (INFN) initiated with a Buy at Rosenblatt; tgt $12
- KeyCorp (KEY) assumed with a Neutral at Citigroup
- Li Auto (LI) initiated with a Buy at China Renaissance; tgt $37.20
- M&T Bank (MTB) assumed with a Buy at Citigroup
- NanoString Technologies (NSTG) initiated with a Buy at Canaccord Genuity; tgt $50
- NeoPhotonics (NPTN) initiated with a Neutral at Rosenblatt; tgt $16
- NIO (NIO) initiated with a Buy at China Renaissance; tgt $32.40
- Regions Fincl (RF) assumed with a Buy at Citigroup
- Reata Pharmaceuticals (RETA) assumed with a Buy at Goldman; tgt $91
- S&P Global (SPGI) resumed with an Outperform at Credit Suisse; tgt $495
- XPeng (XPEV) initiated with a Buy at China Renaissance; tgt $55.60
Gapping down
In reaction to earnings/guidance:
- COOK -19.1%, ENJY -10.7%, MOMO -8.7%, SCS -5.8%, KBH -3.8%, ASTL -1.9%, FSM -1.7%, EXAI -1.6%, DRI -1.5%, OLLI -1.2% (also launches a store remodel program)
Other news:
- APLS -5.6% (announces pricing of public offering of common stock)
- JD -4.1% (announces JD Logistics' proposed financing)
- BXMT -2.4% (commenced offering of $300 million aggregate principal amount of convertible senior notes due 2027)
- ASND -1.8% (announces $500 mln convertible notes offering)
Analyst comments:
- AA -2.3% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
- LDOS -0.8% (downgraded to Equal Weight from Overweight at Wells Fargo)
Gapping up
In reaction to earnings/guidance:
- TCOM +7%, OXM +6.5% (also increases dividend), FUL +5.1%, TITN +4.8%, SOL +3.5%, AMRC +2.5%
Other news:
- NKLA +18.2% (expects to deliver 300-500 BEV trucks largely in H2 of 2022; commercial truck production begun this week)
- PLTK +5.1% (acquires JustPlay.LOL)
- SPIR +3.9% (announced the expansion of their existing partnership with Slingshot Aerospace)
- JBT +3.2% (provides financial targets at Investor Day)
- STGW +3.1% (authorizes new $125 mln share repurchase program)
- EGY +2.9% (signs contract to support subsea reconfiguration and FSO deployment at Etame Field)
- MOLN +2.7% (Publication of Preclinical Data from CD40 Therapeutic Candidate MP0317 in Cancer Immunology Research)
- WIX +2.6% (authorizes $500 mln securities repurchase program)
- RIOT +2.5% (enters into a separation agreement with COO)
- VNE +2% (reports planned date for closing of merger and future CEO)
- MITK +1.9% (acquires HooYu for £98 mln in cash)
- ALK +1.6% (to update long-term growth strategy at today's Investor Day; company also extends credit card agreement with Bank of America through 2030)
- KBR +1.3% (secured a contract from a leading midstream company for a world-scale olefins production facility to be built on the U.S. Gulf Coast)
- DDD +1.2% (enters partnership with Enhatch for personalized medical devices)
Analyst comments:
- BTI +2.9% (upgraded to Overweight from Neutral at JP Morgan)
- ARCO +2% (upgraded to Buy from Neutral at BofA Securities)
- JCI +1.8% (upgraded to Buy from Hold at Deutsche Bank)
- BVN +0.9% (upgraded to Equal-Weight from Underweight at Morgan Stanley)
Early premarket gappers
- Gapping up:
- OXM +6.5%, TCOM +6.2%, SOL +5.9%, PLTK +5.1%, FUL +5.1%, JBT +3.2%, STGW +3.1%, WIX +3%, RIOT +2.7%, MOLN +2.7%, EGY +2.7%, SGHC +2.2%, MITK +1.9%, FSM +1.9%, DDD +1.5%, KBR +0.6%
- Gapping down:
- COOK -18.6%, ENJY -10.7%, MOMO -8%, APLS -6.9%, SCS -5.8%, JD -4.1%, KBH -3.6%, ASND -3.5%, OLLI -1.9%, ASTL -1.9%, EXAI -1.6%, CS -1.1%, PRM -0.8%, ARGX -0.5%
Christie’s offers Warhol Marilyn for $200mn
Christie’s has set ambitions high for Andy Warhol’s signature square silkscreen, “Shot Sage Blue Marilyn” (1964). The auction house describes the work as “poised to become the most expensive 20th-century artwork to sell at auction” when it is offered for $200mn in May. The work vies with Pablo Picasso’s “Les femmes d’Alger (Version O)” (1955), which sold for $179.4mn in 2015 and is currently the priciest 20th-century work to sell publicly — though this is after fees and before inflation is factored in.
Certainly, the Warhol’s asking price is a record — the previous high was for Amedeo Modigliani’s “Nu couché” (1917), estimated at $150mn in 2018. (This sold for $157.2mn, including fees.) The Warhol is being offered without a guarantee from the Zurich foundation of the late siblings Thomas and Doris Ammann, to benefit children’s charities.
ECB to oversee wind-down of Russia-linked bank in Cyprus
RCB to repay €2.8bn of customer deposits or transfer them to another bank
The European Central Bank has taken the unusual move of appointing a temporary administrator to oversee the wind-down of RCB Bank, a Cypriot lender with strong Russian ties, which has been barred from agreeing new loans, deposits or investments.
The move was announced on Thursday and means RCB, which was created as a subsidiary of Russia’s state-owned VTB Bank in 1995, will repay its €2.8bn of customer deposits or transfer them to another bank, as first reported by the Financial Times.
RCB said in a statement on Thursday: “Although RCB has been, and remains abundant in liquidity and capital, the ongoing and extremely volatile geopolitical situation requires it to transform and adopt a new strategy — phasing out banking operations, while at the same time ensuring that the best interests of its clients are secured.”
The lender, which agreed the transfer of VTB’s controlling stake to its management on the day Russia invaded Ukraine, said it planned to transform itself into “a regulated asset management company, given the substantial assets on its balance sheet”.
Formerly called Russian Commercial Bank, the lender is in effect winding itself up before customers’ concerns over the war in Ukraine lead to it suffering the same fate as the Austria-based subsidiary of Russia’s Sberbank, which was placed into administration this month after being hit by a run on its deposits.
Banks with Russian clients have been particularly badly hit by western sanctions that limit the size of new deposits Russian nationals can make.
“The ECB decided to appoint a temporary administrator to closely monitor RCB Bank’s liquidity position and capital position and to oversee the orderly repayment of its depositors,” the ECB said in a statement on Thursday.
“The temporary administrator will not replace the current management body, but instead work with it and support the orderly implementation of the bank’s voluntary phasing-out plan,” it added.
>>> Up
* Acerinox Raised to Outperform at Credit Suisse; PT 17 euros (+)
* BAM Raised to Buy at ING; PT 3.50 euros
* BAT Raised to Overweight at JPMorgan; PT 4,000 pence
* BBVA Raised to Buy at JB Capital Markets; PT 6.50 euros (+)
* Bechtle Raised to Buy at Jefferies; PT 63 euros
* Bridgepoint Raised to Buy at Numis; PT 434 pence (+)
* Burford Capital Raised to Buy at Peel Hunt; PT 1,000 pence
* Enel Raised to Buy at Jefferies; PT 7 euros
* LU-VE Raised to Buy at Intesa Sanpaolo; PT 23.80 euros (+)
* Orsted Raised to Hold at Jefferies; PT 750 kroner
* OVB Holding Raised to Buy at SRC Research; PT 30 euros
* OVB Holding Raised to Buy at SRC Research; PT 30 euros
* Outokumpu Raised to Neutral at Credit Suisse; PT 5.60 euros (+)
* Pandora Raised to Buy at DNB Markets; PT 940 kroner (+)
* Rightmove Raised to Sector Perform at RBC; PT 630 pence
* Schnitzer Steel Raised to Overweight at KeyBanc; PT $58
>>> Down
>>> Down
* Alcoa Cut to Equal-Weight at Morgan Stanley; PT $100
* Aperam Cut to Neutral at Credit Suisse; PT 51 euros (+)
* CaixaBank Cut to Neutral at JB Capital Markets; PT 3.60 euros (+)
* Drax Cut to Hold at Jefferies; PT 700 pence
* Enagas Cut to Sell at Bestinver; PT 18.50 euros (+)
* eQ Cut to Reduce at Inderes; PT 27 euros
* eQ Cut to Reduce at Inderes; PT 27 euros
* Finnair Cut to Sell at SEB Equities; PT 35 euro cents
* IAG Cut to Hold at Deutsche Bank; PT 155 pence
* JDE Peet's Cut to Sell at Berenberg; PT 24 euros
* L'Oreal Cut to Underperform at Jefferies; PT 314 euros
* Metrovacesa Cut to Neutral at Alantra Equities; PT 9 euros (+)
* Nokian Renkaat Cut to Hold at Nordea
* Wizz Air Cut to Hold at Deutsche Bank; PT 2,900 pence
>>> Initiation
>>> Initiation
* Aker BioMarine ASA Rated New Buy at Nordea; PT 60 kroner
* Befesa Rated New Overweight at Morgan Stanley; PT 81 euros
* Freenet Rated New Neutral at Oddo BHF; PT 25 euros
* Scatec Rated New Hold at Arctic Securities; PT 140 kroner
>>> Call
* Scatec Rated New Hold at Arctic Securities; PT 140 kroner
>>> Call
* BAT Raised to Overweight at JPMorgan on Vapor Potential (+)
* Bechtle Raised to Buy as Jefferies Says 4Q Marks the Trough (+)
* Befesa Initiated With New Overweight Rating at Morgen Stanley (+)
* European Utilities Stocks Facing ‘Defining Moment’: Jefferies
* Games Workshop On Track to Deliver ‘Strong’ 2H, Says Peel Hunt (+)
* MorphoSys a Buy at Berenberg With Pipeline Seen Undervalued (+)
* Rightmove Upgraded at RBC on Confidence It Can Meet Expectations
* Rightmove Upgraded at RBC on Confidence It Can Meet Expectations
* Three Airlines Downgraded at Deutsche Bank on Tough Outlook (+)
* U.K. Defense Spending Boost Probably Coming in Autumn: Citi (+)
* Zur Rose’s Growth Challenging; Changes and Volatility Ahead (+)
Gucci Launches Customization Vault Project With Virtual Shop 10KTF for NFT Initiative
As per the project, Gucci's creative director Alessandro Michele's avatar travels in the New Tokyo metaverse, invited by digital artisan Wagmi-san to his virtual shop, creating outfits inspired by the Aria and Love Parade collections.
10KTF Gucci Grail
IMAGE COURTESY OF GUCCI
MILAN — Gucci is bringing customization to a new level, designing a digital identity in an alternative virtual world, generated through the codes of the brand.
The luxury group has collaborated with virtual shop 10KTF to create the “10KTF Gucci Grail” project, a new NFT initiative that is taking place in the brand’s experimental space Vault.
Digital outfits are customized for those who already own a PFP, or an NFT profile “Picture for Proof” used by collectors as a portrait, or as an expression of artistic and technological talent. Bored Ape, World of Women and Cool Cats are among some of the 11 NFT selected collections.
As per the project, Gucci’s creative director Alessandro Michele‘s avatar travels in the New Tokyo metaverse, invited by digital artisan Wagmi-san to his virtual shop, creating two outfits in different colors, inspired by the Aria and Love Parade collections, respectively. The clothes are reserved for those who want a personalized Gucci outfit to wear in the parallel digital worlds.
Over the past few days, the icon of a crystal ball, a gift donated by Michele to Wagmi-san, was offered to three groups of people — those who already own a PFP, those who are part of the Gucci Vault community on the Discord platform, and those who already “live” in New Tokyo, where Wagmi-san is based.
Those who have redeemed the magical globe have been able to use it to see the outfits, choose them and receive the customized digital avatar representing them in a total Gucci look, created in the meta-atelier of Wagmi-san.
On Thursday, the last part of the project will allow those who have the crystal bowl to receive their PFP personalized with the chosen Gucci look.
Gucci underscored that “acquiring personalized virtual garments also involves several steps, not unlike the actual process of securing a designer creation (which requires several fittings).”
The 10KTF Gucci Grail project
IMAGE COURTESY OF GUCCI
All this is especially timely. As reported, the first Metaverse Fashion Week kicks off on Decentraland on Thursday featuring catwalks, virtual retail storefronts, immersive experiences, arty spaces with fashion and music, panel talks and other events. More than 60 brands are on deck to participate in Metaverse Fashion Week, including Tommy Hilfiger, Dolce & Gabbana, Elie Saab, Nicholas Kirkwood, Perry Ellis, Imitation of Christ, Estée Lauder, Etro and many more, with several setting up shop in digital stores that visitors can teleport to and browse.
As reported, The Gucci Vault has been playing host to a series of crypto-based projects, including NFT drops such as the SuperGucci collaboration with Superplastic.
Gucci teamed with the creator of animated celebrities, limited-edition vinyl toys and digital collectibles to unveil SuperGucci, a three-part drop including NFTs and ceramic artworks. The project also includes Superplastic’s animated celebrity artists Janky and Guggimon in the Gucci Vault.
The event builds on Gucci’s signature designs and Superplastic’s celebrity-packed CryptoJanky NFT drops created by Janky and Guggimon.
Gucci has also launched on Discord to foster open conversations with the community about what’s next for the experimental space.
Vault will continue to present monthly drops of rare vintage finds, as well as a regular rotation of exclusive capsules, special collaborations and new brands.
This is the latest metaverse initiative for Gucci, which last May participated in Christie’s online auction, Proof of Sovereignty, curated by Lady PheOnix, one of the leading voices for contemporary digital art and culture in the new media landscape.
Gucci was present with its first NFT, with artwork conceived using digital animation drawn from Gucci Aria, the house’s fashion collection that marked its 100th anniversary in 2021. The fashion film was codirected by Michele and award-winning photographer and director Floria Sigismondi.
The artwork underlying the NFT recognized Aria’s overarching message of a yearning to bloom and flourish after the shadow of winter has passed and this visual tale brought Gucci into a new media space. The starting bid was $20,000, but the NFT was sold in June at $25,000.
Also, Gucci sold a digital version of its Dionysus bag on Roblox for about $4,115 last August, which is roughly 20 percent more than the physical object.
Why Hudson’s Bay Co. Wants Kohl’s Corp.
The Toronto-based Hudson's Bay is a leading bidder for Kohl's but has some competition.
Last week’s disclosure that Hudson’s Bay Co. is bidding for Kohl’s Corp. came as a surprise, yet there appears to be plenty of rationale for a deal.
Richard Baker, the governor, chairman and chief executive officer of the Toronto-based HBC, is a risk taker, a shrewd dealmaker, and he knows real estate well and how to shine a light on the hidden values in a company. He’s been in the business of buying, operating and selling department store retailers and retail real estate.
“Richard Baker needs another revenue stream for Hudson’s Bay,” said one retail expert who requested anonymity. “There is only so much growth potential left in Saks and in Hudson’s Bay,” which operates strictly in Canada, while Saks operates in the U.S. and Canada.
“A deal for Kohl’s would give Baker something to play with other than Saks and Hudson’s Bay,” said another retail source. “You can bet Baker is looking at the Kohl’s real estate. He could sell off some of it. Amazon and others are looking for additional properties they could use for warehouses.” There could also be sale-leasebacks of store properties.
Some reports value Kohl’s real estate at $8 billion, higher than the company’s current market cap of around $7.8 billion. Bidding action on Kohl’s has pushed the stock price up.
Hudson’s Bay could bring the Menomonee Falls, Wisc.-based Kohl’s to Canada, though that market is roughly one-tenth the size of the U.S. and it’s limited, and Kohl’s, with its moderate prices, could cannibalize sales at The Bay department stores that are throughout Canada. Expanding U.S. retail into foreign countries is never easy, and most often unsuccessful. Target’s foray into Canada failed, and Nordstrom and Saks Fifth Avenue locations in Canada have reportedly not all lived up to expectations.
There could be back-of-the-house synergies obtained by integrating Kohl’s into HBC, and if a deal is consummated, HBC could consider splitting Kohl’s dot-com and brick-and-mortar stores businesses into separate companies. Kohl’s management has rejected that idea but has been under pressure from activist shareholders to consider the possibility and other strategic alternatives, including selling the company. Macellum Advisors, which has a 5 percent stake in Kohl’s, has been most critical of the retailer’s financial performance and management.
Baker, along with Marc Metrick, CEO of Saks.com, engineered the split up of the physical stores and dot-com businesses of HBC’s Saks, Saks Off 5th and Hudson’s Bay divisions. The moves enabled HBC to attract investors and improve assortments technology, and web experiences, and recruit some talent. HBC hopes to ultimately take Saks.com public, mirroring the IPO of Mytheresa.com a year ago.
There’s another reason why HBC would pursue Kohl’s: Baker’s ambition to grow HBC by obtaining the Neiman Marcus Group and combining it with Saks Fifth Avenue to create a luxury empire in the U.S., has not been realized, despite years of on-and-off talks between the companies. Last year’s bankruptcy of the Neiman Marcus Group and its restructuring out of Chapter 11 proceedings via a debt-for-equity deal gave NMG new owners, making the possibility of an HBC merger with NMG more remote.
HBC has had mixed success with retail operations. It was unable to turn around Lord & Taylor and Fortunoff’s, which were both shut down, though they were struggling prior to HBC’s ownership, and HBC pulled out of Europe after buying and selling Kaufhof in Germany. A handful of Hudson’s Bay and Saks Off 5th stores established in Europe were short-lived and closed after HBC pulled out of Germany.
Still, HBC made a $1 billion cash profit by buying Kaufhof for $2.5 billion and selling it for $3.5 billion. That money was used to take HBC private. HBC also profited from the sale of Lord & Taylor real estate, and sources close to HBC told WWD that there has been growth at Hudson’s Bay and at Saks Fifth Avenue, largely through expanding dot-com operations and better merchandising. Saks Off 5th is also growing its assortment and elevating its marketing.
Sources told WWD that the Kohl’s auction process has entered a second phase, and a few months will pass before a resolution. A deal is likely in the high $60 or $70 per share range. Bids received so far are said to be in the mid $60 range. Kohl’s stock is currently trading at just over $60.
HBC and other reported bidders — Sycamore Partners, a private equity firm that has Belk, Loft, Express, Hot Topic, Ann Taylor and other retailers in its portfolio; Leonard Green & Partners, a private equity firm that has been active in the retail sector, and Starboard Value’s Acacia Research Corp. — believe Kohl’s has potential for greater profitability and sales.
Kohl’s fourth-quarter net income declined 13 percent to $299 million and was impacted by inventory shortages, slowed traffic due to Omicron and some tax implication. Operating income, which eliminates the impact of the tax difference, was up 42 percent to $450 million in the last quarter.
For the year, the net reached $938 million, compared to a loss of $163 million in 2020, which was more heavily impacted by the pandemic. Revenues reached $19.43 billion, below the $19.97 billion generated in 2019, but ahead of the $15.96 billion generated in 2020.
Kohl’s generated about $6 billion in volume online, or just under 30 percent of its total volume in 2021, and has stated intentions to grow online revenue to $8 billion annually.
Under the leadership of CEO Michelle Gass, Kohl’s has implemented several growth strategies that haven’t fully kicked in yet and could bear fruit in the future, namely the rollout of Sephora shops inside Kohl’s, the addition of several high-profile brands such as Calvin Klein and Tommy Hilfiger, the plans to open 100 new stores over the next four years, on top of the 1,100 or so already operating, and digital growth. Kohl’s has about 200 Sephora shops installed in its stores, and plans to have Sephora in 850 stores by 2023.
“Kohl’s is going to blossom if you leave Michelle Gass alone,” said veteran retail analyst Walter Loeb. “They are going to get $2 billion out of Sephora. There is a clear direction to be an active and casual destination, and they are opening 100 stores. I think Kohl’s will try to have more locations in center cities, like Target has. There is so much space available in center cities so why not put a Kohl’s in there? Smaller stores in more urban areas would be more productive.”
Kohl’s stores aren’t the most exciting retail theater. Yet they are easy to shop with simple, one-level floor plans. They’re also accessible, having off-mall locations primarily in strip centers so you can drive right up to them. Kohl’s is also associated with offering value and discounts, and with its strong loyalty program and popular Kohl’s Cash rewards.
Speculation that HBC would partner with Sycamore on a deal for Kohl’s is believed to be false. Sources said HBC placed its own bid, as did Sycamore. Kohl’s has acknowledged there have been bids submitted but has not identified the bidders.
“I like Kohl’s as a company. I happen to think there is a lot of opportunity at Kohl’s,” said one former retail captain. “A lot of Michelle’s ideas and strategies are quite good. Sephora will be a home run. And there could be opportunities in the real estate market involving some financial re-engineering,” meaning monetizing the real estate to boost profitability while unloading some less profitable locations. “There is also still a lot of opportunity in product. I think it’s still too basic versus fashion. For HBC, this could be a great acquisition.”
“So far, I believe the bids are relatively low,” Loeb said. “It’s a question of whether someone wants to bid aggressively and spend more money. If a deal happens, it maybe could work but only if they keep Michelle and all the merchants in place, though typically the new owners try to put their people in.”
On Monday, Kohl’s characterized the bids received as “non-binding and without committed financing,” as reported. The retailer said it is engaged in a “robust” review of certain bids to acquire the company and is giving the bidders an opportunity to refine their offers.
Kohl’s said in a statement that Goldman Sachs has been authorized to “coordinate with select bidders who have submitted indications of interest to assist with further due diligence so that they have the opportunity to refine and improve their proposals and include committed financing and binding documentation.”
On Tuesday, Macellum issued a letter to shareholders urging them to vote for the 10 individuals Macellum has nominated for the Kohl’s board, which would wipe out the existing board and create a new one. Kohl’s, meanwhile, is urging shareholders to stick with the existing board. Shareholders will vote on the board at the Kohl’s annual meeting scheduled for May 11.
Macellum also expressed doubts about the company’s growth strategies, “We believe the board is allowing management to embark on a high-risk strategy that leaves little margin for error,” Macellum said in its letter. “While we agree having Sephora will help drive traffic to the stores, our concerns are centered around the cost required to do so and the ultimate earnings accretion of this initiative.”
Macellum wrote, “The board’s unwillingness to meaningfully monetize any of the company’s approximately $8 billion in real estate is clear evidence, in our mind, that the current directors are only concerned with maintaining the status quo, rather than creating meaningful shareholder value.”