Macy’s Ties in with Amex – Analyst Blog

Macy’s Inc. (M), one of the leading department store retailers in the United States, recently entered into an agreement to co-brand its Macy’s and Bloomingdale’s credit cards with American Express, thereby announcing an end to the branding deal with Visa Inc. (V).

 

The new Macy’s and Bloomingdale’s American Express cards will be issued by Citigroup Inc. (C) and will carry similar credit limits, current balances, account information, and Macy’s Star Rewards and Bloomingdale’s Insider programs as the existing Macy’s and Bloomingdale’s Visa cards. The customers will receive the new co-branded credit cards by the end of the current year.

 

Macy’s also notified that the holders of Macy’s or Bloomingdale’s store credit card will not be impacted by the agreement, and can continue to use their cards.

 

In a separate story, Macy’s announced that it has bought back senior notes and debentures with a face value of $500 million at a cost of nearly $526 million for the early retirement of debt that matures in the next three years. Going forward, this will significantly lower the interest expense.

 

As part of the repurchase, Macy’s recorded premium and fees aggregating $27 million in first-quarter 2010, which will be offset during the year by a lower interest expense. The company also hinted that interest expense is expected to fall by $15 million in fiscal 2011.

 

Based in Cincinnati, Ohio, with another office in New York, Macy’s currently operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.