Will Anyone Show Up At Macy’s 775 Stores?

By Douglas A. McIntyre Published May 1, 6:09AM EDT

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Will Anyone Show Up At Macy’s 775 Stores? — © jeepersmedia / Flickr

Over the next two months, Macy’s Inc (NYSE: M | M Price Prediction) will open all 775 of its stores. This includes its Bluemercury outlets. The company’s CEO Jeff Gennette says he does not know how many people will show up. He hopes store traffic will return, over time, as consumers are allowed to leave their homes. What the results of Amazon.com, Inc’s (NASDAQ: AMZN) earnings show are that people may have moved their shopping online- in some cases completely.

Macy’s does have an online presence, but its does not represent a large portion of the retailer’s $25 billion in revenue. Macy’s sales were off a modest amount before the COVID-10 spread shuttered its physical operations. In its most recently announced quarter, revenue was $8.3 billion. It provided guidance for the current year, which obviously now is worthless.

To say Macy’s is in financial distress is an understatement. It recently took on $5 billion in debt from Bank of America and other financial institutions. Prior to the deal, Macy’s had killed its dividend and drawn down $1.5 billion from a revolving line of credit

Amazon.com’s earnings show the extent to which people flooded to e-commerce over the last two months. Revenue rose to $75.4 billion from $59.7 billion in the previous year. Revenue from North American operations reached $53.7 billion up 29%.

Macy’s may pick up some business from retailers like J.C. Penney Company, Inc (NYSE: JCP), but it will have to compete with larger bricks-and-mortar retailers like Walmart, Inc. (NYSE: WMT) which have many more stores and a much broader footprint geographically.

It has been said for many years that Amazon killed the traditional retail industry. The spread of COVID-19 accelerated that process, and Macy’s cannot reverse that.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.