The US department store Macy’s, which has had financial troubles for years, announced it has rejected a US$5.8 billion takeover offer, citing reservations about its would-be investors’ financing capacity.

In a statement on Sunday (Jan 21), the company, which also owns the Bloomingdale’s store chain, confirmed it had received “an unsolicited, non-binding proposal from Arkhouse Management and Brigade Capital Management to acquire all the outstanding shares of the company for US$21 per share in cash on Dec 1, 2023.”

Speculation about the US$5.8 billion deal has been swirling since the Wall Street Journal first reported on it in December.

However, Macy’s said the proposal “does not constitute a basis to enter into a non-disclosure agreement,” with Arkhouse and Brigade.

In a letter to the two firms cited in the statement, Macy’s chairman Jeff Gennette said he had “serious reservations” about their ability to finance the deal.

Department stores like Macy’s have seen their results suffer for years as consumers increasingly moved online, and have been forced to reduce in size – a trend exacerbated by the Covid-19 pandemic.

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On Thursday, Macy’s announced it was cutting its workforce by 3.5 per cent. According to its most recent annual report, the group employed around 94,500 people in 722 stores at the end of 2022.

Macy’s net profit more than halved in the third quarter to US$43 million, compared with US$108 million during the same period a year earlier.

The company’s sales fell by seven per cent to US$4.9 billion, with the decline seen in the same proportion in shops and online.

In its earnings results, the group announced plans to close fewer than 10 shops this year, citing an “uncertain macroeconomic climate and the related pressures on consumers.” AFP