Investors suspected it anyway, but on Thursday, Macy's (NYSE:M) CEO Jeff Gennette confirmed it: the department store chain won't be as big coming back from COVID-19 related shutdowns as it was before the pandemic took hold.
"We're going to emerge out of this as a smaller company," said Gennette during what the company described as a virtual fireside chat hosted by research outfit Gordon Haskett. The CEO went on to concede, "We don't quite know what the ramp back looks like."
The announcement still leaves many questions unanswered. Namely, what is meant by "smaller?" The retailer had announced in early February it would be shuttering around 125 of its approximately 775 stores over the course of the coming three years. The conference call suggested the company was still discussing potential changes to the initial store closure timeframe and scope, but still stands as first announced.
Chief among Macy's current priorities is simply ensuring it's got enough liquidity to navigate an uncertain future. Gennette mentioned during the call that Macy's is "definitely [in] cash preservation mode." The department store chain also tapped a $1.5 billion credit facility in March -- most of which is still in-hand -- and reports surfaced earlier this month that Macy's could borrow as much as $5 billion more by issuing new bonds. Gennette did not specifically mention that dollar amount or debt-based funding, although CFO Paula Price was willing to say, "We're all confident that we'll have a deal closed and funded well in advance of when we'll have need for any addition liquidity."
Macy's intends to reopen 68 stores on Monday, with more reopenings scheduled into June.