In a candid phone conversation with CNBC, Macy's CEO Jeff Gennette talks about working from home, the possibly of an industry bailout, shared sacrifice and the department store's chances of survival.
After a virtual fireside chat with Gordon Haskett Research analyst Chuck Grom, in a candid phone conversation with Gennette, CNBC asked him simply: Can Macy's survive this?"I firmly believe that. I firmly believe that when you think about fashion for America, Macy's and Bloomingdales are good curators of that [fashion]," he said. "We have formats from off-price to luxury, with Last Call to Bloomingdale's, a gamut of price points, at a national level.
How is Gennette retaining optimism during the pandemic? After all, he's furloughed much of his workforce, is taking no salary and making decisions about a very uncertain future for a retailer that generates the majority of sales from stores that have been closed six weeks."I miss my team tremendously," he said. Gennette sees them and speaks to them on video calls and Microsoft Teams.
The department store CEO is taking mainly video calls, that begin around 6:30 am every morning until about 7 pm at night. Gennette is working through the weekend as well. He said he is able to drop in on video meetings and phone calls with vendors and trade associations and get updates on financing all day long.
, Gennette said. Likely with a smaller workforce that better aligns with a further reduced cost structure.y. He said the department store is working on four possible scenarios to play out, and planning carefully for the appropriate staffing as a result. When asked if he thought the government should be doing more to help Macy's, with its workforce of around 125,000 —and retail in general. He said the government should look at the retail sector, using whatever metrics it thinks best to measure the significance, to see how important jobs are in the industry.
Gennette said: "I do think, ultimately, there may be opportunities for us to tap into [some government funds/loans/programs] but we can't depend on it.". He confirmed Macy's is still in the process of obtaining private financing, possible secured by inventory, unencumbered real estate or both. Gennette reiterated that Macy's was in a healthy cash position before the crisis, and still has the vast majority of the $1.
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