Activist Investor Barington Capital Targets Macy's

(Reuters) – Activist investor Barington Capital has built a position in Macy's (NYSE:M) and is urging the department store chain to cut spending and consider the separation of a real-estate unit within the company, according to a report by the Wall Street Journal on Monday.

The investor was collaborating with property owner Thor Equities to acquire a stake in Macy's and pushing the company to explore options for its Bloomingdale's and Bluemercury chains.

Barington Capital believes that Macy's shares are undervalued and estimates the value of its real estate to be between $5 billion and $9 billion.

On the news, Macy's shares rose 3% in premarket trading. The company is set to report its third-quarter results this week after having delayed results last month; it disclosed that an employee hid as much as $154 million in expenses over the years.

Barington Capital and Macy's did not immediately respond to Reuters' requests for comments.

Additionally, the activist investor is asking Macy's to reduce its capital expenditure to between 1.5% and 2% of total sales and repurchase up to $3 billion worth of stock over the next three years.