After six decades of steering clear of investments in department stores, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) is suddenly investing in a retail icon.
I’m talking about Macy’s (NYSE: M), the legendary retailer
Berkshire’s last department store investment was Hochschild Kohn, a Baltimore-based retail chain, back in the 1960s, but apparently it didn’t go as planned, so CEO Warren Buffett became wary of traditional retailers. Berkshire first invested in Macy’s in the first quarter of this year, buying about 3 million shares, a 1% stake in the retailer valued at around $55 million. It significantly increased its stake in the second quarter to 7.37 million shares.
At a share price of $23.55, Berkshire’s investment in Macy’s is now worth about $174 million. That’s about 2.8% of Macy’s outstanding shares. To be sure, that’s a small investment for the massive conglomerate, which holds stakes worth tens of billions of dollars in companies like Apple, American Express, and Google parent Alphabet.