Macy’s moving on, raises $4.5 billion in financing
With a batch of new financing and reduced credit commitments, Macy’s said it can gear up for a post-pandemic shopping season in 2020 and into 2021. The retailer reported an expected blow in a preliminary first quarter statement but is focusing on the positives.
The preliminary 2020 financial results did show a net loss of $652 million, or $2.10 per share, for the quarter ended May 2, compared with net earnings of $136 million, or $0.44 a share, a year ago, but CEO Jeff Gennette also said the 450 stores that reopened “are performing better than anticipated,” and e-commerce sales (including curbside pickup) demonstrated “a strong digital business sales trend” in May.
“The COVID-19 pandemic significantly impacted our first quarter sales and earnings results, but I am proud of the way our team navigated this difficult period and maintained the business while our stores were closed,” Gennette said. “We are seeing strong sell-through of seasonal merchandise, and anticipate that we will exit the second quarter in a clean inventory position. The holiday season will be crucial, and the team is working now to get the right merchandise and assortment in place,” continued Gennette.
The retailer had been priming 2020 as a year to test out a rejuvenated private brand strategy and also reported that it had closed on approximately $4.5 billion of new financing, including its previously announced $1.3 billion of 8.375% senior secured notes, as well as a new $3.15 billion asset-based credit agreement. In addition to that, the company amended and substantially reduced the credit commitments of its existing $1.5 billion unsecured credit agreement.
It all adds up to Macy’s expecting to have sufficient liquidity to address its business and purchase new inventory for upcoming seasons.