Macy’s to Furlough Employees as Coronavirus Keeps Stores Closed
Macy’s, Inc. (M) said on Monday it would furlough most of its employees as all of the department chain’s stores remain closed due to government restrictions to keep the coronavirus outbreak from spreading.
The department chain said that the majority of its 125,000 employees will go on furlough from this week. It will maintain the “absolute minimum” workforce needed for basic operations across its Macy’s, Bloomingdales, and Bluemercury brands. There will be fewer furloughs in the chain’s digital business and at its distribution and call centers, Macy’s said in a statement on its website.
“We have lost the majority of our sales due to the store closures,” Macy’s said. “We’ve already taken measures to maintain financial flexibility. While these actions have helped, it is not enough.”
All of the department chain’s 775 stores have been closed since March 18. Last week, Macy’s announced that it is suspending its quarterly dividend, drawing down on its credit line, freezing both hiring and spending, stopping capital spending, reducing receipts, cancelling some orders and extending payment terms.
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Wall Street analysts have a Moderate Sell consensus rating on the stock, split into 6 Holds, 4 Buys and 1 Hold. Macy’s share price nosedived in recent months as result of the market downturn, to $5.37 as of March 30. The 12-month average price target of $13.78 suggests room for 157% growth to the upside once the economy recovers. (See Macy’s stock analysis on TipRanks)
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