Macy's, Inc. shares plunged 14.98% after the collapse of the merger with Federated Department Stores, Inc. The future of the retail giant is uncertain.

On July 15, 2023, U.S. retail giant Macy's announced that it had officially terminated acquisition talks with Arkhouse and Brigade Capital. The deal, which began in November 2023 and was valued at over $6 billion, ultimately fell through.

According to a statement released by the company, Macy's board unanimously decided to terminate discussions after several months of engagement with Arkhouse and Brigade Capital. The company said that the acquirers failed to provide a viable and convincing financing proposal, and the board hoped that the management team could refocus its efforts on executing the company's "bold new chapter" strategy to enhance shareholder value.

Looking back at the acquisition process, in December 2023, Arkhouse and Brigade announced a $21 per share buyout of Macy's. Then, in March 2024, the acquirers raised their offer to $24 per share. To facilitate the due diligence process, Macy's signed a confidentiality agreement with Arkhouse and Brigade and indicated its willingness to further increase the acquisition price after receiving customary due diligence.

However, despite spending hundreds of hours to satisfy the broad due diligence requests of the acquirers and providing thousands of detailed documents, the acquirers did not submit a clear, funded, and executable proposal on the agreed timeline. On June 26, 2024, Arkhouse and Brigade only submitted a "check-in" letter indicating their interest in acquiring all of Macy's outstanding shares at $24.80 per share in cash. However, this proposal and the accompanying financing documents did not convince Macy's board.

In the end, Macy's decided to terminate the acquisition. As a result, the company's stock price plunged on Monday, with a 14.98% increase in price at the time of writing. Earlier, due to the expected merger, the stock price had doubled in a month.

With the challenges ahead, Macy's said it would continue to execute its "bold new chapter" strategy, hoping to enhance value through brand strengthening, accelerated luxury growth, and operational simplification. However, with increasing competition and the rapid growth of e-commerce, Macy's has little time left. The company needs to transform and grow within a limited time frame to regain its retail powerhouse status.