Macy's 2008 Annual Report Download - page 4

• Macy’s and Bloomingdale’s enhanced
and improved our multichannel
selling capabilities through Internet
sites that were supported by new
technologies, functionality and fulfi llment
capacity. Online sales (macys.com and
bloomingdales.com combined) grew
by 29 percent in 2008. During the year,
we successfully piloted a program that
allows Macy’s store sales associates to
search the macys.com Web site from their
registers for merchandise not available
at that location and have it shipped
directly to the customer.
• Bloomingdale’s announced the company’s
fi rst international location with a store
to open in spring 2010 in the Dubai Mall
in Dubai, as part of a strategic relationship
with Al Tayer Group LLC, a leading company
in the United Arab Emirates. Dubai off ers
a unique opportunity for Bloomingdale’s
in a fast-growing, affl uent marketplace.
We expect to learn a great deal about
how our iconic American retailing brands
translate internationally.
Financial Actions
Also important to our company’s progress
in 2008 and early 2009 were fi nancial-related
actions taken to improve profi tability,
conserve cash, adjust our balance sheet and
maintain investor confi dence.
• Macy’s, Inc. acted in December 2008
to amend its existing bank credit
agreement, led by Bank of America and
J.P. Morgan, to provide additional fi nancial
fl exibility. The size of the company’s
credit facility ($2 billion) and its maturity
date (Aug. 31, 2012) remain unchanged,
providing substantial liquidity for the
company to weather the current economic
downturn. The company ended the year
with more than $1.3 billion in cash
and no current borrowings against this
credit agreement.
• Early in fi scal 2009, we used approximately
$686 million of cash on hand for the
early retirement of debt coming due
later in the year, reducing 2009 interest
expense by approximately $7 million and
demonstrating our intention to deleverage
the company.
• The Board of Directors voted to reduce the
Macy’s, Inc. quarterly dividend to 5 cents
(20 cents annualized) per share of common
stock, eff ective with the dividend payable
April 1, 2009. Previously, the quarterly
dividend was 13.25 cents (53 cents
annualized). The reduction in dividend is
expected to conserve $138 million in cash
in fi scal 2009.
• As detailed in the company’s Form 10-K
for the fi scal year ended Jan. 31, 2009,
we wrote down the carrying value of
the company’s goodwill, including that
recorded in connection with the August
2005 acquisition of The May Department
Stores Company. The impairment is
related to the deterioration in the general
economic environment and the resulting
decline in the company’s share price and
market capitalization. The estimated non-
cash write-down of goodwill in the fourth
quarter of 2008 is expected to have no
impact on the company’s business, bank
credit agreement or bond indentures.
While 2008 and the early part of 2009 saw
the worst economic environment of our
generation, we at Macy’s, Inc. have taken the
aggressive actions necessary to drive sales,
maintain profi tability and conserve cash.
The strength and character of a company’s
management and workforce, as well as the
underlying value of outstanding brands and
store locations, emerge in challenging times
such as these.
We deeply appreciate the commitment
of our associates and the support of our
shareholders through this period, and we
look forward with confi dence to realizing
the benefi ts of the work we are doing now
to help Macy’s, Inc. emerge ever-stronger as
the premier department store innovator and
operator in America.
Terry J. Lundgren
Chairman, President and
Chief Executive Offi cer