Retail liquidity: less problems than expected
Morgan Stanley built a model to analyze US retail liquidity (of listed companies). Lessons learned: Apocalypse postponed….

1. Almost all companies identified as “at risk” in prior analysis (LB, GPS, PVH, CPRI, HUD, and CHS) have effectively strengthened their liquidity positions to withstand expected cash flow pressure.

2. Macy’s is the only retailer that still faces 2020 liquidity challenges

3. several retailers were able to opportunistically access credit markets to further fortify their balance sheets (e.g. AEO, BURL, GPS, NKE, JWN, KSS, LEVI, PVH, ROST, TJX), but in some cases, at a high cost.

4. several leveraged retailers have successfully worked with credit facility underwriters to either amend covenants and/or boost cash access (e.g., GPS, LB, KSS, JWN, ROST).