Macy's Ponders Its Biggest Sale Yet -- Its Pricey Real Estate

NEW YORK (TheStreet) -- Following a stretch of sluggish earnings growthMacy's (M) may be feeling as if investors aren't showing it enough love. 

So execs at the department store chain could be nearing a decision, or series of decisions, to extract value from its impressive real estate portfolio. "We are studying various transactions and their pros and cons", said Macy's CFO Karen Hoguet on the company's first quarter call Thursday on the topic of monetizing its real estate holdings.

"We are getting questions also," Hoguet replied in answer to a stock analyst who said he had received inquires from his firm's investors on the issue. According to Hoguet, Macy's is studying "many" opportunities, but noted that so far, nothing has made strategic sense, and any deal of the sort, where real estate is sold, is complicated.

It wouldn't be the first time Macy's generated cash by unloading real estate that equity investors were potentially undervaluing. Last October, Macy's sold its Cupertino, Calif., location to real estate developer Sand Hill Property for an undisclosed amount. Macy's joined fellow mall anchors J.C. Penney (JCP) and Sears Holdings  (SHLD) in selling their Cupertino locations to Sand Hill.

After a wider real estate sale, Macy's could decide to enter into long-term leases to keep some or all of the stores open, but the proceeds could be reinvested into more profitable locations. Macy's execs on Thursday detailed a plan to ramp up their merchandising efforts and other new initiatives at 150 of its top U.S. stores, particularly at 30 locations that it deems "platinum."

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