Berkshire Hathaway's small bet on Macy's marks an unexpected return to department store investing for Warren Buffett's conglomerate. The company disclosed a $55 million stake in the retailer last month, representing roughly 1% of Macy's reduced market capitalization. This positions Berkshire as a shareholder in a sector where Buffett has historically stumbled.

Macy's shares have climbed about 18% since the May 15 filing, outperforming during Wednesday's market decline following strong quarterly results. The department store chain appears to be stabilizing under new leadership that's prioritizing store experience improvements. With fewer competitors remaining in the retail space, Berkshire seems to be betting on consolidation benefits.

Buffett himself has openly criticized his retail track record, calling a 1966 Baltimore department store acquisition one of his biggest blunders. Yet Berkshire maintains significant retail exposure elsewhere, holding an 8% stake in Kroger and owning private companies including See's Candies and various jewelry and home furnishing chains.

The Macy's investment signals that Greg Abel, Berkshire's new CEO, may pursue different opportunities than his predecessors while maintaining the conglomerate's willingness to invest in traditional retail formats. This small position could grow if Macy's turnaround strategy gains traction.