Dive Brief:

• Activist hedge fund Starboard Value has thrown in the towel and sold its entire stake in Macy’s, according to a Friday filing with the Securities and Exchange Commission. Reuters had first reported the move in March; the filing Friday covers that time period.

• The hedge fund, which according to Reuters owned nearly 1% of the retailer as of December, spent months pressuring the struggling department store retailer to extract value from its real estate asset. Although Macy's made some moves, they bore little fruit. Starboard Value and Macy’s did not immediately responded to Retail Dive’s requests for comment.

• Starboard founder and CEO Jeff Smith in October said that the firm bought into Macy’s “too early” and that it was growing impatient with the retailer, which has been reluctant to develop an aggressive real estate play along the lines of those made by Sears Holdings Corp. and Saks Fifth Avenue parent Hudson Bay Co. 

Dive Insight:

Starboard announced its stake in Macy’s in July 2015, and has been dialing up pressure on the retailer to reduce its store footprint ever since.

Experts have told Retail Dive that Macy’s has too many stores and is likely to end up shuttering even more than the 100 locations it has planned for closure by this year. Last week, in fact, both Jan Kniffen, CEO of the consulting firm Worldwide Enterprises, and Oliver Chen​, Cowen & Co. analyst, suggested that Macy’s may have to close more stores. The market "probably wants to see another 100 Macy's stores close," Kniffen told CNBC’s Squawk Box program on Thursday. "You just can't have 6, 7, 800 stores right now in America if you're a full-line department store retailer,” he said.

Chen said the need for closures is driven by market share losses from off-price retailers like TJX Cos. "[S]hare losses vs. both off-price (TJ Maxx and Ross Stores) and Amazon will continue in the foreseeable future," Chen wrote

Although Macy’s isn't the real estate company that, say, Hudson's Bay Co. is, the retailer did respond to Starboard Value's pressure by naming a board member and an executive with real estate chops. In March 2016, William Lenehan, an expert in real-estate investment trusts, joined the board, according to The Wall Street Journal.

Moreover, last year the company announced the closure of 100 stores, many of which are to be sold for handsome price tags.  The Securities and Exchange Commission has leaned on Macy’s to make its real estate monetization efforts official, writing the company a letter suggesting that investors would be better served if Macy's listed real estate sales as gains in a separate line on income statements, rather than as expense reductions. 

While that has begun to furnish a steady stream of financial gains, Starboard apparently had bigger plans for a real estate payoff that did not align with Macy’s vision.

In its first quarter, the company received cash proceeds associated with real estate transactions of $96 million and booked $68 million of real estate gains. Of those, $47 million were related to the sale of the company’s Downtown Minneapolis property. Macy’s is under contract to sell two more floors of its downtown Seattle store, after selling floors five through eight two years ago; that transaction is expected to close in this coming fall, the company said. Macy’s also said that stores in Temple, TX, and Dublin, OH, will close.