Home / Knowledge / News / Apparel/Garments / Fitch affirms Macy's long-term IDR at 'BBB'
Fitch affirms Macy's long-term IDR at 'BBB'
21
Apr '14
Fitch Ratings has affirmed the ratings of Macy's, Inc. (Macy's) and Macy's Retail Holdings, Inc. (MRHI), including the long-term Issuer Default Rating (IDR) at 'BBB' and short-term IDR at 'F2'. The Rating Outlook is Stable.
 
KEY RATING DRIVERS
The ratings reflect Macy's strong and growing market share of the department store sector, above-average operating margins, strong free cash flow (FCF) and stable credit metrics. Fitch expects Macy's will continue to take market share in the near- to intermediate-term, although long-term secular trends in the department store space remain negative and the decline in mall traffic has accelerated.
 
Leading Position in Middle Market: Macy's is well-positioned in the traditional department store space, which has seen a lot of consolidation over the past decade. The company's comps trends have outperformed the department stores under Fitch's coverage by an average of over 200 basis points (bps) over the past three years (on a sales weighted basis), clearly indicating the company's strong position as a market share gainer. Macy's strong operating momentum has benefited from its 'My Macy's' localization, omnichannel offerings (Fitch estimates internet sales currently account for more than 10% of total sales), and MAGIC selling strategies.
 
Macy's share of the department store segment has grown to 15.7%, gaining an additional 3.4% of the market after being relatively stable at around 12.3% (using NAICS codes for department store industry sales) over 2006-2009. Fitch expects Macy's will continue to take market share over the next three years on top-line growth of 2%-3% relative to Fitch's industry growth expectation of minus 1% to minus 2%.
 
Looking at the overall domestic apparel, accessories, and home-related categories, Fitch expects a market consolidator would need to generate top-line growth 2% or above to ward off competition from other channels such as specialty, discount, and online. This could be achieved by relatively flat to modest comps growth at the store level and mid-teens growth from online sales, which would contribute roughly 200 bps to overall comps.
 
As a result, Fitch expects Macy's will continue to outperform its department store peers and maintain or modestly grow its share of the overall domestic apparel, accessories, and home-related categories in the near- to intermediate-term.


Must ReadView All

Textiles | On 24th Jul 2017

Govt extends deadline for GST composition scheme to Aug 16

The Government on India has extended the deadline for small...

L-R: Dhanapal, JMD, Best Corporation; Prabhu Damodaran, Convenor, ITF; Narayanasamy, MD, Micro Cotspin; Senthilnathan, MD Rasitex India; and Sabapathy, MD, Prasanna Spinning Mills

Textiles | On 24th Jul 2017

TN mills seek partnership with cotton growing states

Spinning mills in Tamil Nadu are seeking stronger partnership with...

Textiles | On 24th Jul 2017

Irani terms GST as a ‘great step towards transparency’

Union textiles minister Smriti Irani has termed the Goods and...

Interviews View All

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Deepak Jain
Baggout

We are using Facebook and Instagram to promote ourselves

Awen Delaval
Samatoa

'Natural fibres are appreciated for traditional authenticity'

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X