Macy's (M) is closing 150 stores, but there is one location that won't shutter its doors, according to its new CEO Tony Spring.

"Herald Square is the definition of Macy's. It's our flagship. It's iconic. It's an entire city block. As it goes, so does New York City," Spring told Yahoo Finance over the phone. "We want this store to be successful and vibrant."

Estimates for Macy's real estate portfolio vary, especially for this coveted location.

Based on Yahoo Finance's findings in December, Evercore ISI pegs the entire portfolio at $5 billion to $7 billion, with the Herald Square location valued at $900 million to $1.5 billion. TD Cowen puts Macy's real estate at $7.5 billion to $11.6 billion, while JPMorgan values it at $8.5 billion — with Herald Square worth at least $3 billion, according to a client note led by Matthew Boss.

"You can make an argument that Macy's real estate is worth more than [its] market cap. ... There is an argument to be made that Macy's has hidden assets that are actually valuable," Morningstar analyst David Swartz told Yahoo Finance Live.

This comes as America's largest department store recently rejected a $5.8 billion buyout offer from one of its shareholders, Arkhouse, and its partner Brigade Capital Management. Now all eyes are on how the retailer will transform its business and unlock the value of its real estate.

Spring admits that the Herald Square location, as it stands now, could evolve.

"We're always open to new ideas" as consumer preferences change, he said. "If new food ideas come along, new entertainment ideas come along ... I think we've shown a willingness to flex the store to try to make sure that it represents what people are interested in."

Many are speculating what the future could hold for the building.

"In 10-20 years' time, do you need a store of that size in New York City?" asked Neil Saunders, GlobalData’s managing director of retail. "If the answer to that is no, then you have to start thinking about what else you do with it."

"For the sake of their balance sheet, hopefully, they're able to hold on to [the store]," Forrester analyst Sucharita Kodali said, adding, "They may end up doing some sort of a sale-leaseback and unlocking some of the cash that is in that store."

For now, though, the focus seems to be on rightsizing the real estate portfolio at large.

On Tuesday, Macy's announced its 2023 earnings, as well as plans to close 150 underperforming locations — including 50 by year-end. The company will be left with roughly 350 locations, or what it calls go-forward stores.

Spring said "a good number" of the closing stores are owned by the company, which allows Macy's to tap into their real estate value.

"Over the next three years, we estimate non-go-forward store monetization proceeds of roughly $500 million to $650 million and asset sale gains of about $250 million to $350 million," Spring said on an earnings call. "Working together with our real estate advisers, our team has generated over $2.4 billion of real estate monetization proceeds from 2015 to 2023."

A Macy's veteran, Spring joined its luxury chain Bloomingdale's in 1987 and took over the top job just three weeks ago. He said the company evaluated its collection of shops over a seven-month period, including store performance, digital performance, geography, demographics, and conditions of the mall.

"Is the value to monetize better than the value to operate?" Spring said the team asked themselves. "In some cases, [those] 150 stores, it was."

Others think this plan has been a long time coming, though it ultimately leaves Macy's future in doubt.

"This plan is overdue. It's really long overdue. Macy's has a lot of stores and malls that are not viable in the long term," Swartz said.

"There has to be some concern, though, that the company just keeps getting smaller, the revenues going lower every year, closing 150 stores runs the risk of losing customers that may never come back. So it's unclear that there's really any growth plan in Macy's at all," added Swartz.

Macy's future is a smaller company, predicted Swartz, though its current market cap of less than $5.5 billion reflects that reality.

In the meantime, Spring's work has just begun.

"It's foolhardy to think that leaving the business as it exists today is a recipe for success in the future. We're going to evolve," he said.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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