Macy’s Inc. is springing back to life.
While the department store chain’s fleet of about 775 stores have been closed since mid-March due to the coronavirus crisis, Macy’s today confirmed to FN plans for its reopening — with 68 units to unlock their doors on Monday in states that are easing their lockdown restrictions. The stores will operate under reduced hours, from 11 a.m. to 7 p.m.
A second batch of about 50 stores is expected to reopen on May 11. Within the next six weeks, Macy’s plans to open all of its outposts — which operate under its namesake banners as well as under the Bloomingdale’s and Bluemercury names — assuming that coronavirus infection rates slide and local governments allow retailers to reopen.
In doors that reopen, Macy’s is taking steps — similar to essential retailers such as Target and Walmart— with the aim of keeping both staff and shoppers safe. Sneeze guards are being installed in stores, cleaning procedures are being enhanced and workers will be required to wear protective equipment. Further, Macy’s will place sanitation stations throughout stores and social distancing procedures will be the “new norm” for consumers. Bra-fitting, alteration and ear piercing services have been suspended.
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While Macy’s e-commerce operations have continued throughout the pandemic, the company said on March 30 that it had “lost the majority” of its sales with its brick-and-mortar business shut. Amid sliding sales, the retailer announced that day that it was furloughing the majority of its staff and “moving to the absolute minimum workforce needed to maintain basic operations.”
As an additional cost-cutting measure, Macy’s has implemented pay reductions for employees at the director level and above, with chairman and CEO Jeff Gennette forgoing his salary since April 1. To improve its financial flexibility, the retailer additionally suspended its quarterly dividend, deferred capital spend and tapped its $1.5 billion revolving credit line. Further, Macy’s withdrew its earnings outlook for the 2020 fiscal year and did not offer an updated forecast.
Macy’s unveiled a three-year turnaround plan in February that included trimming 125 stores from its total footprint, cutting 2,000 jobs — or about 9% of its corporate workforce — and ramping up investments in both higher-margin private labels and off-price through Macy’s Backstage. It shared expectations for these moves to save the company $1.5 billion annually by the end of fiscal 2022 and said it expected its top 250 stores to account for 78% of sales by 2021. However, these plans have hit a standstill due to the coronavirus — and the company has also faced mounting pressure to address its debt load. According to S&P Global Ratings, Macy’s debt maturities over the next three years amounted to roughly $1.8 billion, with $533 million due in January 2021 and another $450 million in January 2022.
