- Macy's drops out of the S&P 500 index to be listed on the S&P small-cap 600 index.
- The U.S department store company lost more than 70% in the stock market in 2020 so far.
- The retailer suspended dividends, closed stores, & furloughed employees in March.
The global retail sector has taken a huge blow due to the ongoing Coronavirus pandemic as consumers are restricted to their homes and spending dropped to a record low. In recent news, the virus-driven downward rally has wiped sufficient value off the U.S retailer, Macy’s Inc. (NYSE:M), for it to be listed on the benchmark S&P 500 index.
On April 6th, Macy’s is expected to quit its place in the S&P 500 index and will now be listed on the small-cap S&P 600 index instead.
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Macy’s Dropped Over 70% In The Stock Market In 2020
At the time of writing, Macy’s is exchanging hands at £3.91 per share in the stock market that translates to over 70% decline in 2020 so far. The downward rally has reduced Macy’s market cap to £1.23 billion, according to the data from Refinitiv.
In a statement on Wednesday, S&P said:
“Macy’s has a market capitalization more representative of the small-cap market space. The company, therefore, will be listed in the S&P 600 index from April 6th.”
Retailers like Macy’s and Gap Inc. were recently pushed into withdrawing financial guidance for 2020, suspending share buybacks and dividends, closing stores, and putting employees on furlough due to the ongoing health emergency.
Sources also informed on Wednesday that Macy’s place in the S&P 500 will now be filled by Carrier Global Corp that offers a range of air conditioning services in the United States.
Macy’s had recently informed its workforce (130,000 employees) that the majority of them are likely to be furloughed. As of March 18th, the U.S department store company has also closed all of its 775 stores including its Bluemercury beauty stores and Bloomingdale’s outlets to minimize the fast spread of COVID-19. The company didn’t highlight an expected date when operations are likely to resume.
Macy’s Online Stores Will Remain Open
The company had also highlighted that it had explored all options to maintain its financial stature including suspending dividends and completely drawing down from its credit facility. The only option left at its disposal was to minimize its workforce.
Amidst the chaos, Macy’s online stores remain open to the public and are serving as the sole source of revenue for the retailer.
According to Macy’s, it will continue to offer health insurance to its furloughed employees through May. The company also said that it wishes to put its workers back on the payroll as soon as the pandemic subsides and business returns to normal.