Jeff Gennette, chairman and chief executive officer of Macy’s Inc.
Mark Kauzlarich | Bloomberg via Getty Images
Macy’s chief sees $10 billion in sales ready for the taking because of the flood of retail bankruptcies due to the coronavirus pandemic.
“You see certain brands today that are either going to Chapter 13 or Chapter 11,” Chief Executive Jeff Gennette said Thursday during a virtual fireside chat with J.P. Morgan analyst Matt Boss. “Well we’ll look at that very carefully depending on the brand … and with the location.”
“We see there’s about $10 billion worth of opportunity that’s up for grabs right now based on what’s going on with the competitive climate,” he said. Without providing specifics, he said Macy’s may add categories in its stores based on what some of these distressed companies’ former customers might be searching for.
He said Macy’s aggressively went after Bon-Ton’s former shoppers and employees, when the department store chain liquidated its 200 locations in 2018.
Already during the pandemic, department store chains Neiman Marcus, Stage Stores and J.C. Penney have filed for bankruptcy protection. Gordmans’ owner Stage Stores could liquidate if it does not find a buyer. Penney is planning to shut about 30% of its stores, or about 240 locations, as part of its restructuring. Nordstrom is shutting 16 stores permanently.
Additionally, home goods chain Pier 1 Imports announced earlier this week it will be liquidating its entire business, after it was not able to find a buyer in bankruptcy court.
Gennette made the comments after Macy’s reported preliminary first-quarter sales and earnings figures. It is expecting to report an operating loss of $905 million to $1.11 billion, compared with net income of $203 million a year ago. The retailer has forecast first-quarter sales to be in the range of $3 billion to $3.03 billion, down from $5.50 billion a year ago.
Macy’s also may have to shut more stores permanently because of the Covid-19 crisis.
Earlier this year, it said it was planning to shut 125 stores over the next three years. On Thursday, CFO Paula Price told Boss the department store chain was taking a “hard look” at its real estate and those three-year plans.
Macy’s shares were up about 1% Thursday. The stock has fallen about 70% during the past 12 months and has a market value of about $1.6 billion.
—CNBC’s Amanda Lasky contributed to this reporting.