Macy's (M) shareholders Barington Capital and Thor Equities on Monday urged the department store chain to cut capital expenditures and consider strategic alternatives for its Bloomingdale's and Bluemercury chains.

The investors urged the company to reduce capital expenditures by 1.5% to 2% of total sales from 4% currently and repurchase a minimum of $2 billion to $3 billion in stock over the next three years. They're also seeking to add Barington and Thor representatives to the Macy's board.

Barington and Thor called on Macy's to evaluate strategic reviews for its "higher-growth" Bloomingdale's and Bluemercury operations, according to a statement.

"Bloomingdale's and Bluemercury have attractive growth prospects that we believe are being stunted by the Macy's nameplate turnaround," a presentation prepared by the investors showed. "We believe Macys' luxury operations would trade at a valuation well in excess of Macy's current multiple levels."

Meanwhile, creating a separate internal real estate subsidiary would enable Macy's to maximize the value of its brick-and-mortar assets. Macy's owned real estate portfolio, including Herald Square in New York City, is valued at an estimated $5 billion to $9 billion, according to the presentation.

"Macy's board should create a separate real estate subsidiary to collect market rents from Macy's retail operations and pursue other asset sale and redevelopment opportunities," Thor Chairman Joseph Sitt said in a statement.

The proposed changes could deliver a projected 150% to 200% total return in Macy's shares over the next three years, the investors wrote in the presentation. Shares of Macy's rose 2.7% in Monday trade.

"We invested in Macy's because we believe the shares are mispriced relative to the upside potential we see in management's new strategic plan and the compelling value of the company's owned real estate assets," Barington Chairman James Mitarotonda said. "However, we are concerned with Macy's large capital expenditure programs."

In a separate statement, Macy's said it remains confident in its strategy disclosed earlier this year and looks forward to engaging with its shareholders, including Barington and Thor.

"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," Macy's said.