NEW YORK — Activist investor Barington Capital Group is calling on department store retailer Macy’s to develop an internal real estate subsidiary, reduce capital expenditures, and explore strategic options for its Bloomingdale’s and Bluemercury chains among other changes to boost its slumping stock, according to its proposal made public Monday.

The presentation to Macy’s shareholders comes after Barington Capital, which has stakes in such brands as Victoria’s Secret, Hanes and Dillard’s, has built an undisclosed stake in Macy’s. Barington said it has partnered with property owner Thor Equities. They said that Macy’s shares are undervalued, and its real estate, including its Macy’s flagship at Herald Square, is worth between $5 billion and $9 billion. They believe Macy’s should create a separate real estate unit to collect market rents from Macy’s retail operations and pursue other asset sale and redevelopment opportunities.

Macy’s Shares Fall 12% This Year

Macy’s shares fell 4% in morning trading, and they have fallen 12% so far this year and closed on Friday at $16.43. The company is expected to report its fiscal third quarter earnings Wednesday after it announced it is delaying its full quarterly results after it discovered an employee intentionally hid up to $154 million of expenses over several years.

As part of the proposals, Barington and Thor are urging Macy’s to cut capital expenditures to between 1.5%to 2% of total sales from the current 4% and repurchase at least $2 billion to $3 billion in stock over the next three years.

Such changes could lead to a 150% to 200% total return for Macy’s stockholders over the next three years, they said.

“We seek to be value-added stockholders at Macy’s that can bring fresh perspectives to the company, especially in the areas of capital allocation, merchandising and retail, and real estate,” said Joseph Sitt, chairman of Thor, and James Mitarotonda, chairman of Barington, in a joint statement.

Barington said in the presentation that Macy’s should look at publicly traded Dillard’s as an example of how to prudently cut expenses and deliver strong returns to shareholders. Dillard’s shares are up 10% since the beginning of the year.

Macy’s has had to confront other activist shareholders looking to make changes as the company struggles with sluggish sales and increased competition from discounters and online behemoth Amazon.

In July, it cut off monthlong buyout talks with two investment firms, saying the bid was inadequate and the financing was not certain. Macy’s said those bidders, Arkhouse Management and Brigade Capital Management, failed to provide it with additional information by its June 25 deadline, including the highest price they would be willing to pay. In April, Macy’s named two independent directors to its board backed by Arkhouse, ending a fight to replace most of the board and to acquire the chain.

Macy’s CEO Tony Spring took the helm Feb. 4 and then later that month he announced a plan to close 150 stores. It also announced plans to upgrade 350 stores, with plans to add more salespeople to fitting areas and shoe departments, while adding more visual displays like mannequins.

The Macy’s stores targeted for closure accounted for 25% of overall square footage but less than 10% of its sales, the company had said.

In a statement, Macy’s said that its board and management team are committed to “delivering sustainable, profitable growth and driving shareholder value.”

“We have consistently demonstrated open-mindedness, including with respect to regularly reviewing the company’s strategy and capital allocation framework and exploring all paths to enhance value,” the company said Monday.

It said it remained confident in its new strategy to cut stores and to upgrade others and expects to share full details of its progress on Wednesday. It also said it looks forward to engaging with its shareholders including Barington and Thor, as it further advances its initiatives and execute toward its long-term goals.