Credit & Capital

Macy’s Raises $4.5 Billion in New Financing

The company said its reopened stores are outperforming.
Macy’s Raises $4.5 Billion in New Financing

Macy’s has raised $4.5 billion as it looks to buy new inventory and reopen stores amid fallen from the COVID-19 pandemic.

The debt includes $3.15 billion in new borrowings against its real estate assets as well as a previously announced $1.3 billion bond offering.

In a statement, chief executive officer Jeff Gennette said the offering gives the company flexibility to operate for the foreseeable future.

A Better Way to Do Ecommerce

A Better Way to Do Ecommerce

Learn how Precision Medical leveraged OneWorld to cut the cost of billing in half and added $2.5M in annual revenue.

“The high quality of our real estate portfolio positioned us well to execute this offering,” Gennette said.

The funds will be used to purchase new inventory, reopen stores, and repay outstanding borrowings under an existing $1.5 billion unsecured credit agreement.

Macy’s also said it expected to post a net loss of $652 million, or $2.10 per share, for the first quarter on net income of $136 million, compared with a FactSet consensus of a loss of $2.18 per share and sales of $3.04 billion.

The company had reopened 450 stores, the majority in their full-format, by June 1, and its curbside pickup business was generating positive feedback. It said its reopened stores were outperforming.

“Our strong digital business sales trend continued throughout May, and it is encouraging to see that as we reopen a store, the digital business in that geography continues to be strong,” 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,” he added.

It expects to release first-quarter results July 1.

Shares of Macy’s jumped 11% in Tuesday premarket trading. They were down more than 4% by early afternoon.

The company’s stock has been down nearly 44% for the year to date, but is up 15.2% for the last three months.

Noam Galai/Getty Images