• by Sarah Mahoney  @mahoney_sarah, April 10, 2024

Macy’s, the uncomfortable recipient of a buyout bid, is declaring a partial win. Arkhouse Capital, which proposed a $5.8 billion offer in January, dropped its proxy contest.

In exchange, the retailer has named Richard Clark and Richard L. Markee -- both of whom were put forward by Arkhouse -- to Macy's board of directors.

In the announcement, Tony Spring, Macy’s new chief executive officer and chairman-elect, said the new appointments will “bring leadership experience as well as valuable real estate and retail industry expertise, respectively, that is complementary to that of our other board members. We are confident the company will benefit from their additional perspectives.”

Weeks after Macy’s rejected the bid to take the retailer private, Arkhouse initially proposed nine director candidates to the retailer’s 14-person board.

Arkhouse has now withdrawn those nominees.

While the announcement signals a thaw, it hardly ends the matter. Macy’s says it will continue to evaluate Arkhouse's proposal, made in conjunction with Brigade Capital Management. “The board is open-minded about the best path to create shareholder value and is committed to continuing to take actions that it believes are in the best interests of the company and all Macy’s shareholders,” the company says.

Under Spring, Macy’s has said it will focus on several initiatives to bolster sales, which have been sagging for years. That includes opening a smaller format Macy’s and expanding the Bloomingdale’s banner.

Clark is the co-founder and managing partner of WatermanClark, a real estate investment and operating company. He spent 30 years at Brookfield Corp., including serving as chairman and CEO of Brookfield Property Group.

Markee, a director on several public company boards, has served in executive roles at such retailers as Vitamin Shoppe and Toys R Us.

“The ending of the proxy fight is good news for Macy’s as it removes uncertainty over the chain being taken over and allows management to firmly focus on its reinvention plan,” writes Neil Saunders, managing director of GlobalData, in his note on the latest development in the board appointments. “It is also a good outcome for the Macy’s brand as it means the chain will continue to be run as a retailer rather than as a financial plaything.”

But he notes activist investors will likely push a sale and leasebacks. “This is an early victory for Tony Spring. However, he will now need to exercise a firm hand on the tiller to keep the board fully focused on his plan to reinvent the iconic chain.”