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Macy’s moving on, raises $4.5 billion in financing

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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.

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The holiday season will be crucial, and the team is working now to get the right merchandise and assortment in place.
Jeff Gennette , CEO, Macy's

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.

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