Moody’s: May outlook now negative

NEW YORK — Moody's Investor Service is holding steady its ratings on May Department Stores debt — however, citing weakening same-stores sales and a sluggish holiday performance, has lowered the retailer's outlook to “negative” from “stable.”

One of the Big Three corporate credit rating agencies, Moody's affirmed its current rating of $6.8 billion in May debt at Baa2, citing the retailer's geographic diversity, historically strong margins and track record of cost containment.

But, said Moody' s, credit metrics aren't likely to improve over the next 12 to 18 months to their level before May leveraged up to finance its $3.2 billion buyout of Marshall Field's. And that concern stems directly from weakening same-store sales, said Moody's.

"May's comparable store sales continue to be negative — down 3.8 percent, excluding divested stores, in the important December holiday period — at a time when most of its direct department store competitors have achieved positive comparable store sales," stated Moody’s.

Indeed, said Moody's, "May might well be more challenged than its peers in offering the compelling merchandise and/or shopping experiences necessary to differentiate itself from discounters and from specialty apparel and home goods retailers."

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.

CURRENT ISSUE

HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!