JCPenney Explores Debt Restructuring Options With Advisers

J.C. Penney

To look into debt restructuring options that would provide the retailer more time to make a turnaround, JCPenney Co Inc has reportedly hired advisers. The retailer had talks with investment bankers as well as lawyers who specialize in helping troubled companies with debt restructuring as well as other financial workouts per unnamed sources, Reuters reported.

The retailer is said to be looking into options encompassing negotiating with creditors or raising more cash. Even so, one of the unnamed sources put out the caveat that the plans for restructuring are at an early stage. But the talks with the specialists show the resolve of the retailer to avoid coming into contact with a bankruptcy filing and make for more financial breathing room. The retailer operates over 860 stores and has 95,000 workers.

The retailer, which is based in Texas, has strong competition from discount retailers like T.J. Maxx and Marshalls. At the same time, the retailer has reportedly had difficulty raising the profile of its online retail business to compete with established players like Amazon. The report also noted that JCPenney has over $1.5 billion available via a revolving credit line, but investors are still selling the retailer’s stock due to financial losses. The retailer’s credit rating, too, is reportedly in junk territory.

The news comes after JCPenney announced in February that it wouldn’t sell major appliances after Feb. 28, “in order to better meet customer expectations, improve financial performance and drive profitable growth” per a blog post at the time. The company also said at the time that furniture will only be available in some stores in Puerto Rico and through eCommerce.

The company also noted in the post, “While configurations vary by store, we are finalizing new layout options, including the reduction of store space previously dedicated to appliance and furniture showrooms to maximize efficiencies, reduce inventory and create an enhanced shopping experience that inspires repeat shopping trips.”


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