Macy’s to be replaced by Carrier Global Corp in the S&P 500 index

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 6^th, 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.

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 6^th.”

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 18^th, 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.