Dive Brief:

• Macy's has hired AlixPartners to explore a strategy to unlock value for investors, CEO Jeff Gennette told analysts on Thursday.

• That could include splitting its e-commerce from its brick-and-mortar stores, considering that AlixPartners is the firm that worked with HBC's Saks Fifth Avenue to break up its operations. "We ... recognize the significant value the market is assigning to pure e-commerce businesses," Gennette said.

• Last month Scott Ostfeld, a partner at Jana Partners, asserted that Macy's should replicate the Saks separation. The activist investment firm then reportedly took a stake in the retailer and communicated directly with its board.

Dive Insight:

Until this week, Macy's has pushed back against the notion of splitting up its e-commerce and brick-and-mortar operations. Now the company will be working with the team that engineered that for Saks.

Previously, spokespeople for the department store pointed to past remarks from Gennette, during his second-quarter call with analysts, touting the retailer's "comprehensive retail ecosystem" with a "powerful combination" of "physical stores in the best malls and the most productive off-mall locations integrated with a best-in-class e-commerce."

On Thursday, along with his acknowledgement of the value that Wall Street puts on pure-play e-retailers, Gennette said the company this year analyzed its e-commerce and brick-and-mortar operations and "how each benefits from being integrated and working together."

"We looked at multiple business models that would create long-term shareholder value, while always respecting the omnichannel behavior of the customer," he said. "This work supported our digitally-led omnichannel Polaris strategy that we are successfully executing."

Now that is to be supplemented with the work it undertakes with AlixPartners, he said.

Department stores so far have been the target of such splits, with pressure also reportedly being applied to Kohl's, while big-box stores and mass merchants have not. At Saks, preserving cohesive branding, merchandising and omnichannel experience took hundreds of contractual agreements between the two newly independent entities, which many analysts see as especially burdensome for the physical stores company. HBC's off-price Saks Off 5th and Hudson's Bay Co. also subsequently took that route.

If Macy's hopes to stay intact, it may have undermined that goal with its recent announcement that it will launch a third-party seller platform next year, according to GlobalData Managing Director Neil Saunders.

"A possible danger of the marketplace is that it will decrease the overlap between stores and online which will, in turn, amplify the calls for Macy's to spin off e-commerce," Saunders said in e-mailed comments. "At present this is a strategy management firmly resists – and is something we applaud them for – but we do not see the matter going away any time soon. In our view, tearing digital and store asunder would be a huge mistake and would, over time, be the death-knell for Macy's as a mainstream brand."

Engaging AlixPartners doesn't mean any split will proceed, but Macy's leadership is obligated to consider it in an environment where its e-commerce operation holds unrealized value, according to Cowen & Co. Managing Director Oliver Chen.

"Investors most likely apply a discount to the physical sides," he said by phone last month. "It comes back to the stock price. Macy's trades at half-a-point times sales and e-commerce businesses trade at double that. From a financial perspective, a board of directors has to evaluate alternatives to maximize shareholder value."