Last year, a presidential hopeful named Donald Trump made highly publicized calls on social media to boycott Macy's (M) Today, Trump is visiting the White House to prepare to assume the world's most powerful office. In the meantime, shares of the storied department store retailer have struggled, but Macy's chairman Terry Lundgren thinks his company did the right thing.
The dispute between Macy's and Trump started in July 2015, when the company said it would discontinue its Donald Trump line of menswear as a result of Trump's derogatory comments about Mexican immigrants. Macy's said it stood for diversity and that Trump's statements were inconsistent with that philosophy.
"We made our decision about a year and a half ago, and stand by our decision," Lundgren told TheStreet in an interview on Thursday. "As I have said, we wouldn't carry product from a political candidate -- and now a politician -- whether they be Republican or Democrat. If Hillary Clinton had a line of women's suits or handbags I wouldn't carry those either. I just think we don't want to be a politically associated company, we sell to everybody at Macy's and have a broad and diverse customer base."
Trump wasted no time unloading on Macy's via his well-followed Twitter and Instagram accounts, launching his call to "boycott" the company on July 1, 2015.
Throughout 2015, Trump tweeted or retweeted some 34 anti-Macy's tweets according to a review of his feed by TheStreet. He has been far quieter this year, only tweeting about Macy's once -- it was a post in January pointing out Macy's 46% stock price plunge in 2015. Dating back to Trump's initial boycott via Twitter on July 1 2015, shares of Macy's have shed about 43%. By comparison, shares of Macy's mall-based rival J.C. Penney (JCP) have been relatively unchanged during that same time span.
While Trump may want to take the credit, his attack on Macy's may have just been a case of coincidence ahead of some bad news from the company. Amid one of the warmest winters in the U.S. on record last year that led to tepid apparel spending during the holidays, Macy's saw its fourth quarter same-store sales decline 4.3%. Adjusted for one-time items, Macy's delivered fourth-quarter earnings of $2.09 a share compared to $2.44 a year earlier as it moved quickly to mark down unsold winter apparel, at the expense of profit.
Since last year's weak holiday season, Macy's has been in full restructuring mode, in large part due to the ongoing shift to online shopping that is requiring less of a need to operate a large bricks and mortar store portfolio. 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.
More recently, Macy's said Thursday that it signed a contract to sell a 248,000-square-foot location in San Francisco for $250 million. The transaction is scheduled to close in January, and Macy's will realize a gain of about $235 million in January 2018. It also disclosed a deal to sell a store in downtown Portland, Ore., for $54 million, which will net it about $36 million when the transaction closes in the fourth quarter. Topping it off, the company said Thursday it would join forces with property developer Brookfield Asset Management to re-develop as many 50 sites that it currently owns or leases.
The company earlier this month sold five stores -- which opened between 1980 and 1993 -- to mall developer General Growth Properties (GGP) for $46 million.
Said Lundgren, "It's hard to tell about the impact [from the tweets] -- we are going through a challenging period in our industry, so they [tweets] certainly didn't help but it's hard to pinpoint if it had any impact."