Macy’s, Inc. Completes Brooklyn Store Redevelopment Transaction
January 29 2016 - 8:00AM
Business Wire
Macy’s, Inc. (NYSE:M) today announced that, as expected, it has
completed the real estate transaction with Tishman Speyer that will
enable the re-creation of its Brooklyn store on Fulton Street.
Macy’s continues to own and operate the first four floors and
lower level of its existing nine-story Fulton Street retail store,
which will be reconfigured and remodeled in a $100 million project
that is beginning this spring and will continue over the next three
years.
Tishman Speyer has now purchased the remaining portion of the
store site, which it will redevelop into approximately 10 floors of
distinct, first-class office space. In addition, Tishman Speyer has
purchased Macy’s Hoyt Street parking facility, which could be used
for a future mixed-use development.
As previously announced, Macy’s will receive $270 million in
cash from Tishman Speyer, of which $100 million will be used to
renovate the Brooklyn Macy’s store.
“We are looking forward with great anticipation to the
implementation phases of this project, which will transform Macy’s
Brooklyn store and significantly enhance the downtown Brooklyn
community, which is emerging as a vibrant center for living,
shopping, working and entertainment,” said Terry J. Lundgren,
chairman and chief executive officer of Macy’s, Inc. “Moreover,
this collaboration with Tishman Speyer is a great example of how
our company can create significant additional value by
strategically exploring the potential of our real estate assets
while maintaining a robust store presence that is being upgraded to
drive future growth.”
As a result of the transaction, Macy’s is expected to record a
gain of approximately $250 million. Approximately $86 million of
the gain will be recognized in the fourth quarter of 2015 and the
remaining $164 million expected to be booked in fiscal 2016 and
fiscal 2017 with specific amounts dependent on the construction
schedule. Macy’s received $68 million in cash from the sale in the
fourth quarter of 2015, with the remaining $202 million in cash to
be received in fiscal 2016 and fiscal 2017.
Given this timing change in accounting for the transaction,
Macy’s management has revised its earnings guidance for the fourth
quarter and full-year 2015, which previously has assumed the entire
gain would be booked in the fourth quarter of 2015. Earnings per
diluted share for the full-year 2015 now are expected in the range
of $3.54 to $3.59, excluding expenses related to cost efficiencies
announced earlier in January and asset impairment charges
associated primarily with spring 2016 store closings. This compares
with previous guidance in the range of $3.85 to $3.90. Updated
annual guidance calculates to guidance for fourth quarter earnings
of $1.85 to $1.90 per diluted share, excluding charges associated
with cost efficiencies and store closings. This compares with
previous guidance for earnings per diluted share of $2.18 to $2.23
in the fourth quarter.
The company will provide additional details when it reports its
fourth quarter 2015 sales and earnings on Feb. 23, 2016.
Macy’s, Inc., with corporate offices in Cincinnati and New York,
is one of the nation’s premier retailers, with fiscal 2014 sales of
$28.015 billion. The company operates about 900 stores in 45
states, the District of Columbia, Guam and Puerto Rico under the
names of Macy’s, Bloomingdale’s, Bloomingdale’s Outlet, Macy’s
Backstage and Bluemercury, as well as the macys.com,
bloomingdales.com and bluemercury.com websites. Bloomingdale’s in
Dubai is operated by Al Tayer Group LLC under a license
agreement.
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of
Macy’s management and are subject to significant risks and
uncertainties. Actual results could differ materially from those
expressed in or implied by the forward-looking statements contained
in this release because of a variety of factors, including
conditions to, or changes in the timing of, cash payments related
to the Brooklyn store transactions, completion of the company’s
financial statements and audit for fiscal 2015, prevailing interest
rates and non-recurring charges, competitive pressures from
specialty stores, general merchandise stores, off-price and
discount stores, manufacturers’ outlets, the Internet, mail-order
catalogs and television shopping and general consumer spending
levels, including the impact of the availability and level of
consumer debt, the effect of weather and other factors identified
in documents filed by the company with the Securities and Exchange
Commission.
(NOTE: ADDITIONAL INFORMATION ON MACY’S, INC., INCLUDING PAST
NEWS RELEASES, IS AVAILABLE AT
WWW.MACYSINC.COM/PRESSROOM)
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version on businesswire.com: http://www.businesswire.com/news/home/20160129005426/en/
Macy’s, Inc.Media - Jim Sluzewski,
513-579-7764Investor – Matt Stautberg, 513-579-7780
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