Macy’s reportedly weighs raising billions in debt to get though pandemic crisis
The nation’s largest department store company is considering taking on a considerable amount of debt to help it weather the financial crisis brought on by the COVID-19 pandemic.
Macy’s is looking at raising as much as $5 billion in debt, reported CNBC, and will seek to use its inventory as collateral to raise $3 billion and its real estate to raise $1 billion to $2 billion. The retailer is not planning to include its flagship location in New York City’s Herald Square as part of the deal, CNBC said.
Bankruptcy is not a focus for Macy’s at this time, according to the report. But the decision to potentially take on billions in debt for a company that has a reputation of being financially conservative shows the pressure that the pandemic has put on Macy’s (and many other retailers as well).
“Macy’s has taken multiple actions to improve our position and improve financial flexibility, including suspending our quarterly dividend, deferring capital spend, drawing on our credit facility, reducing pay at most levels of management and furloughing the majority of our colleagues,” a Macy’s spokesperson told CNBC in a statement.
The statement also noted that “the company is also exploring numerous options to strengthen our capital structure.”
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