Activists Urge Macy’s to Follow Dillard’s Lead — But Is It a Fair Comparison?

Macy’s is once again under the microscope, not just for its financial performance, but for what some say it could learn from its Southern rival, Dillard’s.

Activist investment firms Barington Capital Group and Thor Equities released a joint letter last week urging Macy’s Inc. to unlock shareholder value by monetising real estate, reconsidering its luxury segments, and, notably, drawing inspiration from Dillard’s approach to capital allocation.

“Barington believes Macy’s should look to its department store peer, Dillard’s, for a successful model in capital allocation,” the group wrote, citing Dillard’s superior shareholder returns and disciplined spending.

Between 2018 and 2024, Dillard’s returned approximately 60% of its cash to investors, generating a 788% shareholder return. In contrast, Macy’s returned 25% of its cash and saw a 12% decline in share price over the same period, according to Barington’s analysis of S&P Capital IQ data.

Not Just a Numbers Game

While both department stores are legacy mall anchors with overlapping merchandise assortments, experts caution that the comparison oversimplifies the realities on the ground.

“Macy’s stores are not good, and Dillard’s stores are much better,” said Nick Egelanian, president of retail development firm SiteWorks. “Dillard’s is handling every aspect of the business better. They’re still in a contracting industry, but they’re showing it’s possible to make money if you’re skilful.”

Beyond store experience, Dillard’s is still led by the Dillard family, which controls voting shares and runs the business with near-opaque decision-making. The company doesn’t hold public earnings calls and largely avoids external influence — a far cry from Macy’s national footprint, complex brand structure, and board-managed operations.

“They do what they think is right for themselves as a family, almost as if it’s a private business,” said Mark Cohen, a Columbia Business School professor and former retail executive.

Barington itself experienced Dillard’s resistance firsthand in 2008, when it tried to influence the company’s sourcing and expense strategies — but was allegedly ignored for months.

What Activists Really Want

According to shareholder activism adviser Keith Gottfried, this campaign is less about Macy’s retail strategy and more about capital deployment.

“They’re not attacking Macy’s retail strategy,” Gottfried told CouponOutlet. “This is about maximising shareholder value.”

Still, Macy’s isn’t standing. The company recently transitioned to cost accounting from the century-old Retail Inventory Method (RIM), aligning with rivals like Nordstrom to gain better visibility into inventory and margins — a move expected to help streamline operations and boost profitability.

How This Affects Shoppers

While these boardroom battles might seem distant to everyday consumers, the outcomes can directly affect store closures, pricing strategy, and customer experience. Macy’s shrinking store count — now around 350 flagship locations — and growing focus on smaller-format stores reflect efforts to rightsize in a challenging market.

By contrast, Dillard’s has kept its 273 locations running smoothly, particularly in the South, with a leaner product mix and stronger in-store appeal. But it’s also less transparent, making it harder for shoppers to see behind the curtain.

For online deal hunters and consumers seeking value, the stakes are high. Investor-led changes could lead to cost-cutting, clearer pricing models, or even restructured brand offerings across Bloomingdale’s and Bluemercury.

Conclusion

Macy’s may learn from Dillard’s discipline, but copying its playbook wholesale won’t be easy — or perhaps even possible. With pressure mounting and more activist voices joining the conversation, shoppers should expect continued evolution in how Macy’s balances customer experience with investor expectations.