Activist Investors Are Now Shopping at Department Stores

Activist Investors Are Now Shopping at Department Stores

U.S. department store chains have been reporting steady sales declines and a sharp erosion in profitability since the beginning of 2015. Even the best-run companies in the industry have been hurt by plunging mall traffic and off-price retailers' market share gains.

That said, many of the top department store companies have valuable real estate portfolios. The resulting combination of high asset values and weak earnings has drawn the attention of numerous activist investors.

Macy's (NYSE: M) attracted interest from Starboard Value a couple of years ago. However, the activist fund exited the investment earlier this year, as sales declines accelerated at Macy's. More recently, Hudson's Bay (TSX: HBC) and Dillard's (NYSE: DDS) have become targets for real estate-focused activist investors. Let's take a look at whether the activist campaigns at these two companies hold any promise for investors.

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Source: Fool.com