Macy's potential buyer can't line up financing for deal

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However, Hudson's Bay's existing equity partners, including mall operator Simon Property Group Inc, have been reluctant to back Hudson's Bay's bid for Macy's, which would require them to invest more money in mall real estate, even as consumers continue to abandon them in favor of internet shopping, the sources added.

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So even a mall owner doesn't want to put their own money into a major anchor tenant. Wow.

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To mount a credible offer for Macy's, which has a market capitalization of close to $10 billion

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Under pressure from activist hedge fund Starboard Value LP, Macy's has made some small moves to monetize its real estate, estimated to be worth $21 billion.

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Equity of 10 billion and real estate portfolio alone is 21 billion. Either the company is taking on crazy debt, or the market has assigned a negative value to the retail business.

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Unfortunately this may put Macy's more along the track on which Sears/K-Mart and JCPenney are traveling--the one toward bankruptcy (and Chapter 7 is very likely).

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Same place, different path. Macy's grew way, way too fast. It wasn't that long ago when they only had one store - the one in NYC. Growing some fast forced it to move down-market... and now it no longer has the cache of a higher-market chain, but it doesn't offer the values of a lower-market chain.

Economics 101. Cost Leadership or Differentiation. Gotta be one or the other. Everyone in the middle gets eaten eventually.