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 28th Jun 2016

CII issues 6-point plan for textile & apparel industry

Indian textile and apparel industry has the potential to create over...

Textiles | On 28th Jun 2016

Telangana subsidises power tariff for textile sector

The Telangana government has decided to give Rs 2 per unit subsidy on ...

Apparel/Garments | On 28th Jun 2016

Bangladesh garment exports up 9.4% in July-May

Readymade garment exports from Bangladesh increased by 9.41 per cent...

Interviews View All

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Karan Arora
Karan Arora

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

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

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
june 2016

F2F Magazine

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search