Business

Macy’s will cut about 2,350 positions, or 3.5% of its workforce.
The legacy department store is trying to reduce costs and boost slowing sales.
The move comes as Bloomingdale’s CEO Tony Spring prepares to take over the Macy’s CEO role from the outgoing Jeff Gennette.

People cross the street outside Macy’s Herald Square store on December 17, 2023 in New York City. 
Kena Betancur | Corbis News | Getty Images

Macy’s on Thursday said it will cut about 3.5% of its workforce and close five of its namesake mall locations as the legacy department store moves to trim costs and turn around slowing sales.
The move will affect approximately 2,350 positions across its corporate office and stores, company spokesman Chris Grams said.

“As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company,” the company said in a statement.
The company notified employees about the layoffs on Thursday and the last day for impacted employees will be Jan. 26.
Stores that will be shuttered are located in Arlington, Va.; San Leandro, Calif.; Lihue, Hawaii; Simi Valley, Calif. and Tallahassee, Fla. The stores will close in early 2024, Grams added.
Macy’s is the middle of an effort to turn the roughly 166-year-old department store into a brand that resonates with consumers who are shopping online, looking for value and turning to competitors including e-commerce retailers like Amazon and Shein, big-box players like Target and off-price names like TJX-owned T.J.Maxx instead of its stores. As part of that push, Macy’s is overhauling its private label brands, opening smaller shops outside of the mall and looking to its beauty chain, Bluemercury, and higher-end department store, Bloomingdale’s, to drive growth.
In the fall, the company said it would open up to 30 smaller stores in strip malls over the next two years. Macy’s has been better known for giant mall stores, but the company is trying to chase consumers in the suburbs who are going to outdoor shopping centers a short drive away for groceries or a new outfit.

Macy’s, the parent company that includes its namesake brand, Bloomingdale’s and Bluemercury, will also get a new leader soon. Tony Spring, CEO of Bloomingdale’s, will step into the CEO role for Macy’s in early February as outgoing CEO Jeff Gennette retires.
On the company’s earnings call in October, Chief Financial Officer and Chief Operating Officer Adrian Mitchell hinted that Macy’s would take another hard look at its stores. He said the company had to “deliver relevant products, strong value and a more enjoyable shopping experience,” and some of that would include “optimizing our physical footprint.”
“We are committed to bringing more inspiration on a daily basis to our customers,” he said. “We look forward to sharing more on how that ladders to long-term profitable growth on our fourth quarter call.”
Mitchell also told investors on the call that Macy’s “anticipated closure of less than 10 locations in early 2024.”
Yet Macy’s sales and stock performance have lagged. The company has not yet reported its holiday quarter, but said in October that it expected same-store sales to decline by up to 7% for its fiscal 2023. It’s expected to report fiscal fourth-quarter earnings in late February.
Shares of the company closed on Thursday at $17.93, down nearly 11% so far this year. That compares to the roughly flat performance of the S&P 500 during the same period.
Macy’s has 723 locations across the country, as of Oct. 28, the end of the most recently reported quarter. The majority of those — roughly 500 —are its namesake stores, followed by 158 Bluemercury stores and 56 Bloomingdale’s stores.
The department store chain’s footprint has gotten smaller in recent years, however. About four years ago, Macy’s announced another major layoff and wave of store closures. It made the announcement in February 2020, just weeks before the Covid pandemic led to lockdowns and the temporary shuttering of many malls and retail stores across the country.
At the time, Macy’s said it would shut 125 stores over the following three years and slash about 2,000 corporate jobs, as it closed its Cincinnati headquarters and tech offices in San Francisco.
The company is reconsidering its store count again.
In March 2023, Gennette said the company was “evaluating the right number and mix of on- and off-mall locations,” and added that the customer and retail backdrop had changed since the February 2020 announcement. He said since that 2020 announcement, Macy’s had closed about 80 namesake locations and had plans to soon close another five.
“We have shuttered our most significant underperformers, exited dying centers and improved the existing store experience, while delaying closures of others that are cash flow positive,” he said on the March call. “Today, roughly 99% of our mall base is profitable on a four-wall basis.”
The news on Thursday was first reported by The Wall Street Journal. More

Wendy’s has tapped a new chief executive, Kirk Tanner, who has spent more than three decades with PepsiCo.
Outgoing CEO Todd Penegor has been at the helm of the company since 2016.
Wendy’s has overtaken Burger King as the second-largest burger chain in the U.S. by sales, but the chain has struggled with the slowdown in low-income consumers’ spending.

A ‘now hiring’ sign outside of a Wendy’s on October 08, 2021 in Miami, Florida.
Joe Raedle | Getty Images

Wendy’s has tapped PepsiCo veteran Kirk Tanner as its new chief executive, effective Feb. 5, as the burger chain tries to boost its share price and ease pressure from activist investors.
Tanner is currently head of Pepsi’s North American beverage business. Prior to his time at the company’s drink unit, he spent three years leading Pepsi’s global food service division. In total, he has spent more than three decades with Pepsi.

Kirk Tanner, chief executive officer of North America beverages for PepsiCo Inc., speaks during the Bloomberg Power Players Summit in Miami, Florida, U.S., on Friday, Jan. 31, 2020. 
Marco Bello | Bloomberg | Getty Images

Outgoing Wendy’s CEO Todd Penegor has been at the helm of the company since 2016. Under his leadership, Wendy’s successfully launched its breakfast menu nationwide, helping the company overtake Burger King as the second-largest U.S. burger chain by sales.
But the chain has also faced some setbacks during his tenure. Low-income consumers have cut back their spending at Wendy’s, and a large franchisee declared bankruptcy in November.
Shares of Wendy’s have fallen 14% over the last year, dragging its market cap down to $3.97 billion.
Activist investor Blackwells Capital is planning to challenge Wendy’s board, Reuters reported in December. The CEO transition could change the firm’s mind. But if Blackwells nominates its own board candidates, it’s kicking off a fight with another activist investor: Nelson Peltz, who is chair of Wendy’s board.
A year ago, Peltz dropped an effort by his firm Trian Fund Management to acquire the company, signaling confidence in its performance as Peltz pursued a proxy fight with Disney. Trian has been an investor in Wendy’s since 2005.

Wendy’s is expected to release its fourth-quarter earnings on Feb. 15.
Pepsi also announced Thursday that Ram Krishnan, the company’s chief commercial officer and head of its international beverage division, will succeed Tanner as CEO of its North American beverage unit. More

Birkenstock shares slumped Thursday after the company warned profit margins could be hit in the year ahead.
The shoe company said it will invest in scaling up its business in 2024.
The company made its public debut in October, opening at $41 per share.

A Birkenstock banner hangs outside the New York Stock Exchange in New York on Oct. 11, 2023, as Birkenstock launches an initial public offering.
Angela Weiss | Afp | Getty Images

Birkenstock shares slumped 7% Thursday after the company warned about its 2024 outlook during its first earnings report since its initial public offering.
The German shoe brand reported a quarterly loss of about 28.3 million euros, or about $30.8 million, with an adjusted EBITDA margin of over 30% for its prior fiscal year. Company executives also warned that 2024 margins will likely face a “modest headwind” as the company spends more money to ramp up operations — even as it expects revenue to grow 17% to 18%.

In its earnings report, Birkenstock said it aims to substantially grow and invest nearly 150 million euros in retail store expansion and production capacity in 2024.
Birkenstock CEO Oliver Reichert said in a statement that last year was the company’s most successful year, and he remains confident the company can grow its business in 2024. Reichert said he plans to tap into “significant” geographic and production expansion while the company remains “undeterred” by the broader macroeconomic landscape.
The company traded for the first time in October, opening at $41 per share. The debut came nearly 250 years after the company was founded by German cobbler Johann Adam Birkenstock.
“The best thing for the brand would be staying family owned, but within the family there were so many problems, so we go for the second-best option and that’s to be public and give the brand back to the people,” Reichert said during the company’s IPO.Don’t miss these stories from CNBC PRO: More

Trian will release a dense white paper explaining its full case for why investors should elect Nelson Peltz and former Disney CFO Jay Rasulo in the coming weeks.
Peltz said in a CNBC interview that he and Rasulo will be like “Batman and Robin” if they get elected to the Disney board.
Earlier Thursday, Peltz spoke to CNBC’s “Squawk on the Street.”

Activist investor Nelson Peltz.
David A. Grogan | CNBC

Disney and its investors are going to start hearing a lot from activist investor Nelson Peltz.
In the coming weeks, Peltz’s Trian Fund Management plans to post on X, formerly known as Twitter, and add content to its website RestoreTheMagic.com as a crescendo to launching a dense white paper explaining its case to add Peltz and former Disney Chief Financial Officer Jay Rasulo to Disney’s board. That paper will be released in a couple of weeks, Peltz said in a CNBC interview after appearing on “Squawk on the Street” earlier Thursday.

In February, Trian plans to meet with proxy solicitors Glass Lewis and ISS, after which it will begin lobbying shareholders through March and up to Disney’s planned annual shareholder meeting. Trian expects the gathering will be in April. Disney’s annual meeting last year was April 3.
Trian filed a preliminary proxy statement Thursday, which outlined some of the reasons Peltz believes Disney shareholders should elect him and Rasulo to the board as they push to boost its stock performance. Those include getting Disney streaming profit margins to 15% to 20% by 2027. Disney’s streaming business currently loses money and won’t break even until later this year, CEO Bob Iger has said.
Trian wants Disney to be more transparent with its businesses. Disney plans to launch a direct-to-consumer ESPN service either later this year or in 2025 as the sports network’s traditional cable subscription model fades. Before it debuts, Trian wants specific short-term profitability targets to ensure it’s a viable business.
“What they really need is accountability,” said Peltz.
After it reports earnings Feb. 7, Disney will release its definitive proxy materials, which include the date of the annual meeting.

Typically, both Trian and Disney will then make their arguments to proxy advisory services Glass Lewis and ISS, followed by solicitation of shareholders and recommendations by the firms. That advice is critical because it can sway large investors and index funds. Neither side usually knows who is winning until days or hours before the annual meeting because those massive investors often vote late in the process.

The dynamic duo

Trian has targeted the Disney board for being too connected to Iger, who has five times renewed his contract to push back his retirement. Iger has said he plans to leave Disney in 2026, and has been actively seeking a successor since he returned to Disney at the end of 2022.
Peltz has been on several boards, including Proctor & Gamble and Mondelez, which have named new CEOs. Peltz said his success in finding top executives is part of why he should join Disney’s board.
“I do a lot of executive searches,” said Peltz. “I’m like a headhunter.”
While Peltz outlined why he feels Disney’s stock performance can improve with his presence on the board, he’s still just one person. Even if Rasulo is elected, they’ll still be only two voices on a Disney board Peltz has criticized for being in Iger’s pocket.
Still, Peltz said boards sometimes simply need to be jumpstarted by individuals who aren’t afraid to question longtime CEOs such as Iger.
“We’re going to be Batman and Robin,” Peltz said. “Boards can get turned around quickly if they start to hear some good points.”
WATCH: CNBC’s full interview with Trian Partners founding partner Nelson Peltz

Don’t miss these stories from CNBC PRO: More

The National Basketball Association said a second Golden State Warriors game has been postponed.
The team’s assistant coach Dejan Milojević died earlier this week.
The Warriors are scheduled to play next on Wednesday against the Atlanta Hawks.

Assistant coach Dejan Milojević and Kevon Looney, #5 of the Golden State Warriors, talk before the game against the Los Angeles Lakers during the Western Conference Semifinals in the 2023 NBA Playoffs at Crypto.com Arena in Los Angeles on May 6, 2023.
Noah Graham | National Basketball Association | Getty Images

The National Basketball Association said a second Golden State Warriors game has been postponed after the team’s assistant coach Dejan Milojević died earlier this week.
The Warriors’ matchup against the Dallas Mavericks, scheduled for Friday, will be rescheduled to a yet-to-be-announced date, the league announced in a statement. ESPN will instead broadcast the Brooklyn Nets versus Los Angeles Lakers Friday night.

The Warriors announced on Wednesday that Milojević suffered a heart attack at a private team dinner and was sent to the hospital, where he later died.
“We are absolutely devastated by Dejan’s sudden passing,” said Warriors Head Coach Steve Kerr in a press release. “This is a shocking and tragic blow for everyone associated with the Warriors and an incredibly difficult time for his family, friends, and all of us who had the incredible pleasure to work with him.”
Milojević was in his third season on the Warriors’ coaching staff, including the team’s 2022 NBA Championship run. Before joining the team, he served as the head coach for the KK Mega Basket in Belgrade, Serbia, from 2012 to 2020. He was also a member of summer leagues for the Atlanta Hawks, San Antonio Spurs and Houston Rockets.
The Warriors are scheduled to play next on Wednesday against the Atlanta Hawks.Don’t miss these stories from CNBC PRO: More

Activist investor Nelson Peltz is stating his case for joining Disney’s board.
Peltz’s Trian Fund Management, in formally nominating Peltz and former Disney CFO Jay Rasulo to the media giant’s board of directors Thursday, made a list of initiatives and performance targets they’d pursue if elected.
The proxy battle comes as CEO Bob Iger tries to streamline the sprawling media company to rein in spending and make its Disney+ streaming platform profitable.

Activist investor Nelson Peltz is stating his case for joining Disney’s board.
Peltz’s Trian Fund Management, in formally nominating Peltz and former Disney Chief Financial Officer Jay Rasulo to the media giant’s board of directors Thursday, made a list of initiatives and performance targets they’d pursue if elected.

In a proxy filing, Peltz and Rasulo promised to “finally complete a successful CEO succession,” alluding to CEO Bob Iger’s consistent delaying of his retirement date and his return after the firing of former CEO Bob Chapek.
Trian also said it will “align management pay with performance,” calling out Iger’s $31.6 million pay package last year while Disney stock was little changed, underperforming the S&P 500 for 2023.
Trian also aims to target and achieve “Netflix-like margins” of 15% to 20% by 2027, with Peltz adding that he thinks Netflix is Disney’s biggest competition.
The proxy battle comes as Iger tries to streamline the sprawling media company to rein in spending and make its Disney+ streaming platform profitable. Iger has instituted broad restructuring, including thousands of layoffs.
Peltz reiterated in a CNBC “Squawk Box” interview Thursday morning that he believes Disney’s current board oversight is “awful.”

“They said I have no media experience — I don’t claim to have any,” Peltz said Thursday. “But I will tell you, I don’t think they have much media experience.”
Disney has thus far rejected Peltz’s push to join the board.
In the proxy filing, Peltz also touched on the future of ESPN, which he called the “crown jewel” of the company, with the goal of creating a solidified and detailed payback period and business plan for building out the platform. Iger has previously said Disney is prioritizing turning ESPN into the “preeminent” digital sports platform.
Peltz called for a board-led review of studio creativity to “restore leadership accountability” and reclaim the company’s leading box office position.
Peltz and Rasulo aim to execute a clear vision for the brand’s theme parks, targeting “high-single digit operating income growth,” according to the filing.
Peltz told CNBC on Thursday that he paid a visit to Disney World last week.
“It was fascinating because … we didn’t have any special passes. We didn’t have any tour guides. … Everybody was nice. I mean, Magic Kingdom and the Hollywood Studios — terrific,” he said. “All the employees were smiling, and that’s probably in large part because they didn’t own any Disney stock.”
This story is developing. Please check back for updates.Don’t miss these stories from CNBC PRO: More

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