Dive Brief:
- Macy's announced Monday that it has hired Douglas W. Sesler as executive vice president for real estate.
- Sesler will lead the retailer's real estate initiatives, which include exploring joint ventures and partnerships in its stores.
- Previously president of True Square Capital, a real estate investment and advisory firm, Sesler will join the retailer full time Tuesday.
Dive Insight:
Macy's has been under pressure from activist investors to glean more value from its expansive real estate offerings, recently hiring an executive from real estate investment trust (REIT) Four Corners Property Trust to its board. Although Macy's had previously resisted efforts to spin off some of its real estate, it seems like a changing retail space and declining sales have forced Macy's to reconsider.
The Sesler hire will help Macy's see if it can extract some much-needed funds from its real-estate holdings through partnerships or joint-ventures. The idea is not new: Macy's last October sold the top four floors of its store in downtown Seattle as office space, and continues to operate on the lower five levels.
Staples and Sears have also been retooling their stores in the same manner. Staples also on Monday announced that it will add Workbar co-working spaces to some of its stores, while Sears has already revamped some of its locations to include spaces from Whole Foods, Forever 21 and Dick's Sporting Goods.
As the Wall Street Journal points out, these deals are a response to declining foot traffic in brick-and-mortar stores due in part to an uptick in online shopping. Some retailers are searching for new ways to utilize their existing mass of stores and make them more attractive to shoppers, including partnerships with trendy e-commerce brands and popular restaurants in the area. It looks like Macy's, with the hire of Sesler, may be interested in doing the same.
Macy's missed goals related to revenue, cash flow, earnings and expenses in 2015, and in January cut about 4,800 positions, some related to 40 store closings announced last fall. In response to the missteps, Macy’s board of directors decided to slash 2015 executive performance bonuses to zero, according to a filing with the Securities and Exchange Commission. Macy's CEO Terry Lundgren received $11.6 million last year, an 8.6% decrease from the $12.7 million he received in 2014.
