The company would deploy its inventory as collateral for $3 billion of the debt and its real estate as collateral for $1 billion to $2 billion, knowledgeable sources told CNBC.
The CNBC report didn’t say what form the debt would take. Macy’s isn’t focusing on bankruptcy yet, the sources said.
Macy’s, like so many other brick and mortar retailers, has been hammered by the coronavirus, which has kept consumers at home. And the chain has been struggling for years with the rise of online shopping and the growth of specialty retailers.
The company offered a statement in reaction to the CNBC story, saying it’s working to better its finances.
“Macy’s has taken multiple actions to improve our position and improve financial flexibility, including suspending our quarterly dividend, deferring capital spend, drawing on our credit facility, reducing pay at most levels of management and furloughing the majority of our colleagues,” the statement said.
“The company is also exploring numerous options to strengthen our capital structure.”
At last check, Macy’s shares traded at $5.34, up 2.30%, compared to a 1.7% gain for the S&P 500 index. The stock has dropped 69% over the last three months, compared to 18% for the S&P 500.