Macy’s Inc.’s chief financial officer will leave the company at the end of May, placing pressure on the beleaguered retailer to fill a key executive position while battling plummeting sales due in part to lockdowns related to the coronavirus pandemic.
Paula Price, who became finance chief in July 2018 after more than five years as a lecturer at Harvard University and several finance, accounting and board roles at Ahold Delhaize NV, CVS Health Corp. and Dollar General Corp., will remain in her current role until May 31, and serve as an adviser to Macy’s through November, the New York-based retailer said Tuesday.
“This was a personal decision that Paula reached,” a Macy’s spokeswoman said, declining to provide additional details. Ms. Price and members of Macy’s board declined to comment.
The move came as a surprise and was within weeks of Macy’s embarking on a turnaround strategy aimed at cutting $1.5 billion in costs. Macy’s, as part of that plan, was set to shut down 125 stores—following closure of roughly 100 stores that was announced in 2016—and slash 2,000 corporate jobs and close several offices, including its dual headquarters in Cincinnati.
“This was not expected,” said David Swartz, an equity analyst at ratings-firm Morningstar Inc., on Ms. Price’s departure. She participated in the company’s earnings call on Feb. 25 and gave no indication that she would leave, he said. She also spoke at a Bank of America Corp. securities conference on March 10.
Her exit doesn’t instill confidence in the company’s leadership, said Michael Binetti, a senior equity analyst at Credit Suisse Group AG .
Macy’s also exited the S&P 500 on Monday following a decline in its market capitalization fell, and its stock price trades at roughly $5.90 from $17 in early February, according to Factset Inc.
Macy’s share price has perked up in recent days in sync with a broader market rebound.
Bricks-and-mortar retailers have struggled for years to compete with Amazon.com Inc. and other online retailers. Macy’s, once a backbone of U.S. shopping malls, hasn’t been immune, and faced declining profitability even at a time of strong consumer spending in the U.S.
The pandemic has exacerbated the situation. Macy’s said it has lost the majority of its sales since it closed its stores on March 17. The company, which is still offering online sales, has furloughed a majority of its roughly 125,000 employees. It is unclear when the company can reopen stores.
“We think Macy’s will exit this crisis worse off than it entered,” Lorraine Hutchinson, an analyst at Bank of America Corp., said in a note to clients Tuesday. Macy’s is raising additional capital and trying to preserve cash while negotiating with suppliers about extending payables terms, postponing and potentially canceling orders, Ms. Hutchinson wrote.
Macy’s said it launched an external search to replace Ms. Price. The company might struggle to find suitable candidates in the current climate, recruiters say, as CFO candidates don’t want to switch employers during the pandemic-fueled economic crisis.
“Having to lay off people, closing stores, reducing inventory, doing liquidation sales—executives don’t like to do these things,” Morningstar’s Mr. Swartz said.
The Macy’s spokeswoman pointed to the company’s bench of internal executive finance talent, and analysts said they expected Macy’s to quickly pluck a replacement from its ranks.
—Mark Maurer and Dave Sebastian contributed to this article.
Write to Nina Trentmann at [email protected]
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