Nov. 28 (Bloomberg) -- Macy’s Inc., the second-biggest U.S. department-store company, can pay down debt with cash and doesn’t plan to close many locations, Chief Executive Officer Terry Lundgren said.

“We plan no giant wholesale store closings,” Lundgren said in a Bloomberg Television interview today. The retailer is conserving funds by delaying remodeling and can pay down $950 million in debt coming due next year with cash, he said.

The Cincinnati-based retailer’s shares have fallen more than two-thirds this year, and its bonds traded last week at non- investment grade levels, partly on investor concern that Macy’s may have trouble paying off maturing debt as sales drop.

Macy’s, which runs more than 850 locations, has $350 million of bonds coming due in April and about $600 million in July, according to data compiled by Bloomberg. Sales at stores open at least a year may drop as much as 6 percent in the fourth quarter as the U.S. economy falters, Macy’s said earlier this month.

The retailer’s exclusive Martha Stewart home furnishings and Tommy Hilfiger apparel are selling well, Lundgren said in the interview.

“We are in much better shape than almost everybody,” Lundgren said. “We had the smallest negatives among all the department stores in the country, so I suspect that we’ll continue to have a better performance against our competitors.”

Macy’s shares advanced 39 cents, or 5.5 percent, to $7.42 at 1:03 p.m. in New York Exchange composite trading. They have fallen 71 percent this year.

To contact the reporters on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.netEllen Braitman in New York at ebraitman@bloomberg.net;

Last Updated: November 28, 2008 13:14 EST