Macy’s department store has signed a five-year partnership deal with Klarna, a buy now, pay later Swedish payments group.
The company will join investors including BlackRock, Silverlake, Sequoia, and rapper Snoop Dogg among others.
According to the terms of the partnership Macy’s (M) customers will be able to make payments in 4 equal, interest free installments at the time of checkout. Macy’s will be one of the first department store companies to offer Klarna’s buy now, pay later service.
Klara’s offerings to consumers and retailers also includes social shopping and personal finances. The payments and shopping service has more than 200,000 retail partners globally including H&M, IKEA, and Abercrombie & Fitch, and a US consumer network of 9 million shoppers. The Klarna app has more than 12 million monthly active users globally.
On Tuesday, Macy’s announced its partnership with DoorDash for same-day delivery of products through about 500 stores nationwide with no minimum order requirement. (See M stock analysis on TipRanks)
Deutsche Bank analyst Paul Trussell last month raised the stock’s price target to $7 (20.5% upside potential) from $6 and reiterated a Hold rating. Trussel said, “Macy’s continues to see improvement in store sales with solid trends in its digital business while exercising strong expense discipline and inventory management.”
Currently, the Street has a Moderate Sell analyst consensus on the stock based on 1 Hold and 3 Sells. With shares already down 65.82% year-to-date, the average analyst price target of $5.67 implies downside potential of about 2.4% to current levels.
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