Editors' pick: Originally published Oct. 31.
Updated to include additional details.
Let the great unwinding of Macy's (M) vast retail store empire commence.
Macy's announced Monday that it sold five stores -- which opened between 1980 and 1993 -- to mall developer General Growth Properties (GGP) for $46 million. Macy's expects to realize a gain of $32 million on the sales in the third quarter. Three of the stores - Carolina Place in Pineville, North Carolina, Greenwood Mall in Bowling Green, Kentucky and Oakwood Mall in Eau Claire, Wisconsin - will operate through the holiday season and will then be closed in the spring of 2017.
Macy's disclosing the exact locations on Monday that will be closed will likely mark the start of a series of similar announcements in the months ahead. Amid the shift to online shopping that has made operating a vast portfolio of brick-and-mortar sites less lucrative, Macy's said in August it will close 100 stores by early 2017, or almost 15% of its current 728 locations. The company plans to take the savings from operating these low-volume stores and reinvest them in its top-performing locations. The locations of those 100 stores were not disclosed at the time.
"We are talking about a lot of real estate here," said Starboard's noted activist Jeff Smith earlier this year, reiterating a cry he made in 2015 for Macy's to split up. Back then, Smith wanted Macy's to split up into two companies, one being retail store operations and the other a separate holding company for the company's valuable real estate. At the time, Smith believed Macy's shares would be worth $125 a share if the retailer split the company.
According to Bloomberg data, Starboard Value owned about 0.77% of Macy's outstanding shares as of June 30, 2016.
Macy's has resisted the push to spin off its real estate, but has taken several measures to appease Starboard.
The retailer announced last year that it was pursuing real estate transactions to enhance shareholder value. Macy's completed one such transaction with developer Tishman Speyer on Jan. 29. Macy's has also added executives with real estate experience to its bench. In March, Macy's named William Lenehan, an expert in real estate trusts, to its board followed by the appointment of Douglas Sesler as executive vice president for real estate in April.
The sales announced Monday may help signal to Wall Street that Macy's is undervalued, as Smith has suggested. And that could go a long way to reigniting interest among investors for Macy's struggling stock. Shares have plunged about 29% over the past year, compared with a 1% gain for the S&P 500.