Macy’s bought a large number of wedding decor retailers for $15 billion last year, which is an extraordinary investment.
It’s a lot for a company that’s trying to grow its business, but Macy’s had an incredible amount of risk-taking, said Richard Pielke Jr., an analyst at Wells Fargo.
Macy’s has said it will pay out at least $500 million in back-pay for the companies it acquired, which was part of the reason for its aggressive buying strategy.
“I think that’s a huge mistake,” said Pielkes, who said Macy’s also failed to recognize the huge risk in its buying strategy and made poor decisions.
Macy’s did some good things in the process.
It made some great investments, but it made some bad ones too.
It bought the wedding decor business for $8 billion, and it paid for the $50 million of investments in other companies it did not own.
The company also gave a huge cash infusion to the wedding industry, making it a cash-flow machine for the years ahead.
Macy said that it is looking for a buyer for the company.
