Macy's (NYSE:M) is going the debt route to help support its finances in these challenging times. The company confirmed in a regulatory filing submitted Tuesday that it and one of its subsidiaries have drawn down the entirety of a $1.5 billion credit facility provided for the struggling retailer.
In the filing, the company said that it is doing so "as a proactive measure to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak."
Already facing stiff challenges due to the retail apocalypse, Macy's is being hit hard by the outbreak of SARS-CoV-2, the coronavirus that causes COVID-19. Last week, the company announced it is shuttering all of its stores, including its namesake shops and brands in its portfolio such as Bloomingdale's.
The closures will be in force until March 31, although given the current situation with the coronavirus, it's reasonable to expect this will be extended. Macy's will still conduct business through its online retail sites, but this is not considered an area of strength for the company when matched against rival online stores.
This situation closely follows consolidation measures Macy's had enacted to shore up its struggling business. In February, it said it would reduce its store count by almost 20% over the next three years.
Macy's investors, perhaps hardened by years of bearish news, actually bid the company stock price up on Tuesday. It rose by almost 18%, outpacing both the gains of the broader market and numerous other top stocks.