Macy’s Attracts Czech Billionaire Investor After Share Drop
(Bloomberg) -- Czech billionaire Daniel Kretinsky took a stake in Macy’s Inc. and plans to engage management on ways to improve performance of the struggling U.S. retailer.
Kretinsky’s Vesa Equity Investment amassed a 5% holding in Macy’s for strategic investment purposes, according to a securities filing. The purchase makes him one of the company’s top five shareholders, according to Bloomberg data.
The move is the latest variable for Macy’s, which has been plagued by rising uncertainty since the coronavirus outbreak forced it to close its stores and furlough most of its workers. The chain, which had seen sales declines even before the pandemic, has been seeking additional sources of financing as the lockdown has caused revenue to dry up.
Macy’s shares have slumped almost 70% this year. The stock fell as much as 3.9% in New York on Monday.
In April, following his recovery, Kretinsky said in an email: “We are already investing as we simply believe that the current market is undervaluing certain very interesting and important companies.”
Kretinsky, 44, began his investment career as a lawyer in a local private-equity group J&T two decades ago. He partnered with Petr Kellner to start up his own firm about 11 years ago. Since then, a debt-fueled acquisition spree turned his Energeticky a Prumyslovy Holding from a small Czech utility into one of the biggest power companies in central Europe. His portfolio includes energy and media assets and the Sparta Prague soccer team.
Kretinsky said last month that all his investments have been affected by the global pandemic, although to varying degrees. Among businesses doing well is e-commerce, which is flooded by millions of online orders after lockdowns shut nonessential shops.
While any crisis is a good opportunity for costs savings and optimizations, he said that a moderate approach should now prevail. “Those who will not react enough will lose all or a lot, but those who will overreact will lose as well, potentially a lot.”
He also said in April that the public perception of the outbreak came from misleading math. “In my opinion, the numbers are persuasively showing that the coronavirus, despite being a real tragedy and extremely serious problem for mankind, is not an important life-or-death threat for the standard population with no important underlying health problems.”
Kretinsky’s company EPH didn’t respond to a Bloomberg request for comment on the Macy’s stake.
Macy’s said last week that it would delay its quarterly earnings report due to disruptions from the coronavirus. It also said it would take a charge of unspecified size.
In March, Macy’s was booted off the S&P 500 and its credit rating was cut to junk by Fitch in April. In response Kretinsky’s plans, a Macy’s spokesperson said the company maintains “an open and ongoing dialogue with all our shareholders.”
Vesa may sell the stake or raise it, depending on market conditions, the firm said in the filing. Planned discussions with Macy’s executives, board or other interested parties will center on the business’s management, operations, financial conditions and strategic plans, it said.
©2020 Bloomberg L.P.