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April 1, 2020, 9:46 a.m. EDT

Macy's and Coach, Michael Kors parents join 'fallen angel' ranks as Fitch cuts credits to 'junk' status

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By Tomi Kilgore

Macy's Inc. /zigman2/quotes/201854387/composite M -0.14% , Coach-parent Tapestry Inc. /zigman2/quotes/207417762/composite TPR +1.36% and Michael Kors-parent Capri Holdings Ltd. /zigman2/quotes/206301876/composite CPRI +4.03% all became "fallen angels" Wednesday, after Fitch Ratings cut the companies' credit ratings into "junk" territory. A "fallen angel" is a term used for a credit rating that falls from investment grade status to speculative grade, or "junk" status. Fitch cut Macy's long-term issuer default rating (IDR) one notch to BB+ from BBB-, which is Fitch's lowest investment grade rating; cut Capri's IDR to BB+ from BBB-; and lowered Tapestry's IDR by two notches to BB from BBB-. The outlooks on all three ratings remained negative, suggesting further downgrades are a possiblity, given the "significant business interruption from the coronavirus pandemic and the implications of a downturn in discretionary spending that Fitch expects could extend well into 2021." Shares of Macy's fell 7.1% in morning trading, Capri gave up 9.3% and Tapestry dropped 8.3%. The selloff comes as part of a broader stock market selloff, with the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.48% down 3.0%. "Fitch has assumed a scenario where discretionary retailers in the U.S. are essentially closed through mid-May with sales expected to be down 80%-90% despite some sales shifting online, with a slow rate of improvement expected through the summer," Fitch said.

/zigman2/quotes/201854387/composite
US : U.S.: NYSE
$ 7.13
-0.0100 -0.14%
Volume: 18.62M
Aug. 11, 2020 12:54p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$2.22 billion
Rev. per Employee
$197,992
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/zigman2/quotes/207417762/composite
US : U.S.: NYSE
$ 15.64
+0.21 +1.36%
Volume: 3.28M
Aug. 11, 2020 12:54p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$4.26 billion
Rev. per Employee
$287,889
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/zigman2/quotes/206301876/composite
US : U.S.: NYSE
$ 17.54
+0.68 +4.03%
Volume: 1.44M
Aug. 11, 2020 12:54p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.53 billion
Rev. per Employee
$341,762
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/zigman2/quotes/210599714/realtime
US : S&P US
3,376.70
+16.23 +0.48%
Volume: 1.52B
Aug. 11, 2020 12:54p
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