Macy’s has officially slid back from the brink of disaster.
The embattled department store announced Monday that it has closed approximately $4.5 billion in new financing—a sum that comprises a previously announced $1.3 billion of senior secured notes as well as a new $3.15 billion asset-based credit agreement.
The company plans to use the infusion to repay outstanding debt on $1.5 billion in unsecured credit.
Jeff Gennette, chairman and chief executive officer of Macy’s, said in the same statement, “With the closing of these financings, the company expects to have sufficient liquidity to address the needs of the business, including funding operations and the purchase of new inventory for upcoming merchandising seasons, resolving its accrued payables obligations, and repaying upcoming debt maturities in fiscal 2020 and fiscal 2021.”
Macy’s plans for the investment, which roughly doubles the size of its credit facility, also include tightening pricing and increasing offerings. The funds give the company “sufficient flexibility and liquidity to navigate our current environment and fund our business for the foreseeable future,” Gennette added. “We are confident this liquidity will ensure Macy’s Inc. remains a strong company to work for, invest in and partner with.”
We reported here in February that Macy’s planned to close 125 stores in the next three years, mostly in lower-tier malls, as part of a new strategy meant to stabilize the company. The store closures will cut 2,000 jobs and reduce its corporate and support-function head count by around 9%.
No word whether the $4.5 billion will reverse those plans or a portion of them.
The company is in the midst of slowly reopening its stores across the United States after roughly three months of closures due to the COVID-19 pandemic. It began offering curbside pickup in New York City, the hardest-hit hub in the pandemic, on Monday.
(Photo courtesy of Macy’s)
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