What happened

Shares of troubled retailer Macy's (NYSE:M) were rising on Monday amid growing optimism that the company might weather the coronavirus pandemic -- and if so, that it could stand to gain market share from wounded rivals.

As of 3:15 p.m. EDT, Macy's shares were up about 11% from Friday's closing price.

So what

Last week, CNBC reported that Macy's has been working on a deal in which it would pledge assets in return for $5 billion in funding to help weather the COVID-19 outbreak. As reported, it's likely to be two separate transactions: one that pledges Macy's inventory as collateral for a $3 billion loan, and a second that would see it pledge some of its real-estate holdings (but not its New York City flagship store) for another $2 billion. 

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

Image source: Macy's.

The stock fell on that news at first, but retail-focused investors may be thinking that it looks better in hindsight. Think of it this way: If Macy's can get through this extended period of store closings, it may well be able to gain market share from rivals who don't make it. Key among them is direct competitor J.C. Penney (OTC:JCPN.Q), which is reportedly close to bankruptcy and could be liquidated. 

That extra $5 billion in cash would be debt that has to be repaid, but if those deals happen, they should put Macy's in a much better position once stores reopen. 

Now what

Investors probably won't have to wait too long to hear directly from Macy's management team. Although the company hasn't yet announced a date for its fiscal first-quarter earnings report, it typically reports in mid-to-late May. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.