Macy’s chair to retire

Macys chairman Terry LundgrenUS department store giant Macy’s long-serving chairman has announced his retirement.

Executive chairman Terry Lundgren will retire from the board of directors in January next year while Macy’s has appointed Jeff Gennette, who has been CEO since March 2017, to the additional role of chairman, thereby completing the planned transition announced in June 2016.

Marna Whittington will  remain lead independent director. Following Lundgren’s retirement, the board will have 10 directors.

“I am proud of our company’s growth, accomplishments and the talent we developed during the 14 years I have led Macy’s, Inc.,” said Lundgren.

The outgoing chairman said he was confident that the company “has the strategies, resources, talent and leadership to capitalise on the fundamental shifts in consumer shopping patterns we have all experienced.”

“Terry has been an outstanding leader for Macy’s and an inspiration for the industry. I thank him for the guidance he has given me during this transition period and wish him all the best in his well-deserved retirement from Macy’s, Inc.,” said Gennette.

“We’ve made good progress this year on the path to return Macy’s to growth and drive shareholder value for the long term. We are working hard to close the year out strong and head into 2018 with momentum.”

Macy’s had fiscal 2016 sales of $25.778 billion operates over 700 department stores under the Macy’s and Bloomingdale’s names, and approximately 160 specialty stores that include Bloomingdale’s The Outlet, Bluemercury and Macy’s Backstage.

Meanwhile, Macy’s offer to buy back up to $400 million of its debt from creditors late last month has fallen short.

The company’s creditors had offered up just more than $1 billion in debt to be repurchased as of December 8.

Macy’s issued a statement prioritising the debt it was looking to repurpose. The company is seeking to retire some of its more expensive debt that doesn’t come due until well into the next decade at the earliest, some of it not until the late 2030s.

As a result of its tender offer, Macy’s expects a pre-tax gain of $13 million for the fourth fiscal quarter of 2017. The company expects to reduce its interest expense on a full-year basis by $26 million.

Last month, Macy’s posted a drop in sales of 6.1 per cent from $5.6 billion to $5.3 billion. Comparable store sales including licensed sales has seen a 3.6 per cent decrease. Gross margin increased from 39.8 per cent in FY 2016 to 39.9 per cent in the current year. Selling cost remained high and has increased from 37.5 per cent to 37.8 per cent.

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