A blockbuster deal in retail could be on the horizon.
The idea is interesting in the fact that Macy's absolutely dwarfs the Hudson's Bay Company in size.
Share of Macy's were up more than seven per cent, trading at $32.99 United States on the New York Stock Exchange.
Last month Macy's slashed its earnings forecast after noting comparable sales, a key metric of retail performance, fell 2.1 per cent in the critical holiday selling period of November and December 2016 combined with the same period a year earlier.
Cincinnati, Ohio-based Macy's has around 900 stores in the US, which includes its Bloomingdale's outlets and its flagship store in New York City's Herald Square.
The Associated Press says, "The reported talks come as Macy's faces pressure to turn its business around after struggling with a string of quarters of sluggish sales and stiffer competition".
Despite this, Macy's has a reported $7.5 billion debt.
Mortimer Singer, CEO of Traub, a retail consulting firm, said that a consolidation would help give both operators more staying power and leverage with their own brands, which are increasingly gaining more control as they open their own stores and sell their products online. "What you are going to do is add a lot of debt, and you are going to move the chairs around on the Titanic".
Outgoing Macy's CEO Terry Lundgren is retiring from the top spot this year but will stay on as chairman.
The news comes a day after reports of disarray in Macy's management. Most of the 23 analysts who follow the stock rate it as a "hold".
Starboard said at the time of its investment that Macy's real estate was worth about $21 billion - more than the company itself.
However, Starboard Value, the activist investor hedge fund run by Jeffrey Smith, is pressuring for seats on Macy's board.
A representative for Macy's did not immediately return a request from Fortune for comment, while HBC declined to comment.
For most of his career, Lundgren earned a reputation on Wall Street as a savvy dealmaker.
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