$ 10 billion in sales due to retail bankruptcies

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Macy’s chief sees $ 10 billion in sales up for grabs due to the ongoing and accelerated retail bankruptcies due to the coronavirus pandemic.

“You see some brands going to Chapter 13 or Chapter 11 today,” general manager Jeff Gennette said Thursday in a virtual fireside chat with Matt Boss, analyst at J.P. Morgan. “Well, we will look at this very carefully depending on the brand … and the location. “

“We see that there are about $ 10 billion worth of opportunities right now depending on what’s going on with the competitive environment,” he said, adding that Macy’s could consider adding more new categories in its stores based on what some of them have gone bankrupt. former business customers may be looking. However, he did not provide specific examples.

He said Macy aggressively sued former Bon-Ton buyers and employees when the department store chain liquidated its 200-plus locations in 2018.

Already during the pandemic, department store chains Neiman Marcus, Stage Stores and J.C. Penney filed for bankruptcy. Gordmans’ owner, Stage Stores, could wind up if he can’t find a buyer. Penney plans to close approximately 30% of its stores, or approximately 240 locations, as part of its restructuring. Nordstrom permanently closes 16 stores.

In addition, hospitality chain Pier 1 Imports announced earlier this week that it would wind up its entire business after being unable to find a buyer in bankruptcy court.

Gennette made these comments after Macy’s preliminary sales and first quarter profit figures. It forecasts an operating loss of between $ 905 million and $ 1.11 billion, compared to net profit of $ 203 million a year ago. The retailer forecast first quarter sales of $ 3 billion to $ 3.03 billion, up from $ 5.50 billion a year ago.

In the meantime, it is possible that Macy’s will permanently close more stores due to the Covid-19 crisis.

Earlier this year, he announced plans to close 125 stores over the next three years. On Thursday, current CFO Paula Price told Boss that the department store chain is taking a “close look” at its real estate and three-year plans.

Macy’s shares have recently risen about 1%. The stock has fallen about 70% in the past 12 months and has a market value of around $ 1.6 billion.

—CNBC Amanda Lasky contributed to this report.

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