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 25th May 2017

Huntsman and Clariant to have merger of equals

Huntsman Corporation and Clariant have announced that their boards of ...

Courtesy: CBRE

Apparel/Garments | On 25th May 2017

European cities preferred for retailer expansion: CBRE

European cities were the preferred new destination for international...

Apparel/Garments | On 25th May 2017

Guess records $458.6 million revenue for Q1 2018

For the first quarter of fiscal 2018, the net revenue of American...

Interviews View All

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Silke Brand-Kirsch
Schlegel und Partner

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

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

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

news category


Related Categories:
May 2017

May 2017

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

SUBSCRIBE


Browse Our Archives

GO


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