NEW YORK -- Now reassured that they will be paid for any new shipments to stores operated by R. H. Macy & Co., many of the retailer's suppliers were busily arranging yesterday to deliver goods they had held on to until the retailer filed for bankruptcy protection.
At the same time, the thousands of dress makers, contractors and electronics companies that are Macy's largest unsecured creditors reacted with a mixture of relief, caution and silence to the company's bankruptcy filing Monday.
Many had suspended or reduced shipments to Macy when it told them on Jan. 10 that it could not pay them. By filing for bankruptcy, Macy was able to get enough new bank financing to assure payments for the tape recorders, blouses, trousers, towels and other merchandise needed to stock the company's I. Magnin, Bullock's and Macy's department stores.
Because of the timing of the bankruptcy -- just after Christmas but just before the big spring shipments -- suppliers will be relatively unscathed by Macy's financial problems.
Not so lucky are the bondholders, whose spirits soared with the price of Macy's junk bonds Friday after news that Loews Corp. might bail out the retailer. The 14.5 percent bonds due in 1998 were up more than 15 cents.
But after trading closed, the announcement came that the Loews proposal had fallen through. The bonds took a nose dive Monday as holders desperately tried to sell off their stakes before the retailer filed for bankruptcy protection.
"At the close on Friday, everything seemed to be very positive, and then just three business hours later on Monday, the company filed for bankruptcy," said Ross Stein, senior vice president of Rickel & Associates Inc., an investment bank in Millburn, N.J., and an investor in the bonds due in 1998. "Bondholders had almost no time to recover."
Mr. Stein said it was unclear how bondholders would fare during the bankruptcy process. Analysts have predicted that they will get perhaps as much as 55 cents or 60 cents on the dollar.
The sense of panic that attended earlier bankruptcies was absent in the aftermath of Macy's filing. Suppliers said that if they had survived the bankruptcy of such prominent retail companies as Federated, Carter Hawley Hale, Hill's and Allied, they were likely to survive Macy's troubles.
"In this case, the manufacturers were relatively unexposed," said Chuck Schwartz, president of Cattiva, a small dress company that supplies merchandise to all three of Macy's department store chains. "The trade isn't going to be as badly hurt as they have in the past."
But those past bankruptcies have altered retail trade in such a way that manufacturers are more vulnerable than ever to problems their customers may have. Five major apparel specialty stores give Mr. Schwartz half of his business, and if one or two of them catch a cold, Cattiva is in risk of catching it.
So Mr. Schwartz played it safe by holding onto merchandise ordered by Macy's stores in the belief that the company would file for bankruptcy protection. Now that it has, he plans to ship orders that Macy needs.
And although the retailer owes Cattiva money, the amount is relatively minor and his name is not on the list of major creditors.
Macy has also developed a sterling payment record with most of its suppliers. While several store companies have forced their vendors to participate in their business woes by wrangling over payments, Macy has generally paid its bills on time.
"You have to respect Ed Finkelstein and Mark Handler," said Dick Baker, president of women's apparel at Esprit de Corp in San Francisco, a sportswear company that is one of Macy's largest suppliers. "They've worked really hard to keep this from happening, and they've always kept the lines of communication open."
Edward S. Finkelstein is Macy's chairman and chief executive, and Mark S. Handler is its president and chief operating officer.