What happened

Shares of several major retail chains were moving lower on Monday, following a Reuters report that Macy's (NYSE:M) has hired an investment bank to explore options for bolstering its finances.  

Here's where things stood for these four stocks as of 2 p.m. EDT today, relative to their closing prices on Friday:

So what

Reuters reported on Sunday that Macy's has hired Lazard, the investment bank, to help it explore options to raise additional cash. The company has also hired lawyers who specialize in restructuring debt, the report said. 

A Macy's sign on the outside of a store.

Image source: Macy's.

Macy's, like Bed Bath & Beyond, Gap, and Kohl's, has faced a steep drop in revenue since closing stores in mid-March amid the COVID-19 pandemic. Because Macy's is the largest U.S. department store operator by sales, retail-focused investors are taking indications that it may seek to raise cash, restructure debt, or both, as signs of the difficulties facing most brick-and-mortar retailers now.

Upscale rival Nordstrom (NYSE:JWN) has already moved to raise additional cash, pledging real estate assets as collateral for $600 million in loans last week. 

A factor likely to complicate efforts to raise cash: Many retailers have seen their credit ratings cut since mid-March, including four of the companies here. Macy's credit rating was cut by Fitch to BB+, below investment grade, from BBB- on April 1. Kohl's rating was also cut by Fitch, to BBB- from BBB. Bed Bath and Beyond's rating was cut to B+, a deep-junk level, by Standard & Poor's on March 30. Gap's senior debt was cut to the equivalent of BB+ from BBB by Moody's on March 26. 

Now what

The news about Macy's isn't really a surprise (or at least, it shouldn't be) for investors who have been paying attention. It has $530 million in debt due in January of 2021; analysts expect the company to be able to make that payment, but it is a concern given the uncertain timeline for reopening stores.

It's a good bet that Bed Bath & Beyond, Gap, and Kohl's will likely have similar conversations with their advisers soon, if they aren't already. Stay tuned.