Macy’s on April 6 will be dropped from the S&P 500, a benchmark stock index of a group of large companies deemed by the rating agency to be representative of the overall U.S. stock market, based on market capitalization.
Air conditioning company Carrier Global will replace Macy's on the index, according to a press release from S&P.
“Macy's has a market capitalization more representative of the small-cap market space,” S&P said, so the department store will be placed on the S&P SmallCap 600 instead, per the release.
There is no shortage of signs of Macy's retrenchment in the retail space, but its exit from the S&P 500 is among the most symbolic.
The COVID-19 pandemic is only making matters worse for the department store giant, which in recent weeks announced a reboot of its turnaround designed to succeed in easier times. Macy's suffered downgrades before that strategy could be engaged, and then again when the outbreak necessitated the temporary closure of all locations.
In emailed comments discussing how inventory stands as one of the remaining levers to pull to address the financial screws tightened by the COVID-19 outbreak, Credit Suisse analysts Wednesday noted that "Macy’s sits at the center of the ecosystem." That positioning makes any moves to cut orders especially worrisome for brands. The department store has already tapped its credit revolver, furloughed the majority of its workforce and curtailed executive pay, putting its recently devised turnaround plan on hold.
The retailer has been downsized in other ways as well. In recent years, the retailer severely trimmed its store fleet nationwide by 100 or so locations, with plans announced this year to cut that further by another 125 and admonitions from some observers that could soon expand to hundreds more.
S&P's announcement did no favors to Macy's already diminished stock price, as shares tumbled further Wednesday morning, down more than 6% at one point.