In a recent interview on 'Varney & Co.', President and founder of Nicholas Wealth Management, David Nicholas, emphasized the significant role of the U.S. consumer. Despite the challenges posed by inflation, the U.S. consumer remains a driving force, shouldering the global economy on its shoulders. This highlights the importance of understanding consumer behavior and its impact on the global economic landscape.

Activist Investor's Perspective on Macy's

Activist investor Barington Capital believes that Macy's needs to reignite its creativity. By featuring more exciting products in stores and hosting engaging events, Macy's can attract younger generations back. This is crucial as Macy's, once a premier department store, has struggled to keep up with rapid industry changes and competition.Jim Mitarotonda, the CEO of Barington Capital Group, is confident in Macy's executive leadership. He believes that there is no reason why the company cannot improve its business execution. While Macy's CEO Tony Spring and CFO Adrian Mitchell have a good understanding of the retail sector, the thinking needs to change.MACY'S ACCELERATES STORE CLOSURES THIS YEARBarington Capital, along with Thor Equities LLC and their affiliates, who are Macy's shareholders, recommend that the retailer make changes to its capital allocation strategy. They also suggest considering other structural actions to improve shareholder value.Mitarotonda emphasizes the need for Macy's to bring on "superb merchants". Since Spring was not on the merchandising side when heading Bloomingdales, it is important to bring in a creative team with strong merchandising and fashion skills.If the product is not exciting, customers will not visit the store or even the Macy's website. It is about creating excitement and driving people into the store through engaging events.MACY'S ACTIVIST INVESTORS WANT THE RETAILER TO MAKE SIGNIFICANT CHANGESThe company also needs to boost its digital marketing strategy by leveraging influencers. Appealing to younger consumers is critical in today's retail landscape. Young people are active on platforms like TikTok, Instagram, and Threads, and Macy's needs to consider this.Barington Capital's chief praised Dillard's for its strong performance. Dillard's has succeeded in merchandising and improving business execution, leading to a significant increase in margins.Over the past year, Macy's shares have fallen more than 16%, while Dillard's stock has increased over 11%. This shows the need for Macy's to take action and improve its performance.Mitarotonda also suggested that Macy's should separate its operating company from its real estate business. This would create more transparency and allow for better management of the real estate. By having a real estate expert manage the property side, the value of the real estate can be maximized.The firm also proposed spinning off Macy's luxury brands, Bloomingdale's and Bluemercury, which are generating positive store sales. If these brands traded independently, they would likely trade at a higher multiple than the corporate parent."It's imperative for the board of directors and the management team to look at how to maximize value for the shareholders," Mitarotonda said.