Macy's is "exploring numerous options to strengthen our capital structure," the company told Retail Dive on Monday.
A spokesperson didn't address whether the department store has hired investment bank Lazard Ltd. in that effort, or tapped debt restructuring attorneys at Kirkland & Ellis, as first reported by Reuters. "We have relationships with a range of advisors," the spokesperson said by email.
The spokesperson disputed Reuters' characterization of its lease obligations, (which the wire service described as "roughly $7 billion"), pointing to a filing with the Securities and Exchange Commission pegging long-term lease obligations at $2.9 billion. That same SEC filing records $3.6 billion in long-term debt.
Macy's digital sales are among the strongest in the department store sector, but they're not enough to stanch the financial bleeding caused by store closures made necessary by the COVID-19 pandemic.
The retailer last month furloughed most of its 125,000-strong workforce and temporarily cut executive pay, including withholding Gennette's salary. Macy's also said then that all its Macy's, Bloomingdale's, Bluemercury, Backstage, Bloomingdale's The Outlet and Market by Macy's stores will remain closed "until we have clear line of sight on when it is safe to reopen."
The retailer seemed to see some light at the end of the tunnel, as holiday sales were surprisingly brisk after a disappointing third quarter. Store comps on an owned basis fell 0.7% over the nine-week holiday period, as comps on an owned plus licensed basis fell 0.6%.
But the disease outbreak, in addition to the devastating health and financial consequences for many, has interfered with any momentum at Macy's. The company had already embarked on plans to right-size its footprint and streamline many of its digital and corporate operations, ahead of its unveiling of a sweeping turnaround dubbed "Polaris." Instead, the company's CFO is on the way out, a move that some observers see as a shift away from a turnaround and toward a financial lifeline.