JCPenney hires advisers to examine debt restructuring: report
Former JCPenney CEO Allen Questrom on the state of the U.S. economy and markets.
Retailer JCPenney has reportedly tapped advisers to examine its debt restructuring options.
Sources familiar with the matter told Reuters the chain has held talks with lawyers and investment bankers who advise companies on debt restructurings. The sources said some of the options included “raising additional cash or negotiating with creditors to push out debt maturities.” However, the sources said the discussions were at an early stage. The talks are aimed toward having the 117-year-old chain avert a possible bankruptcy filing in the future, a source told Reuters.
JCPenney responded with a statement posted to their website, saying that "as a public company, we routinely hire external advisors to evaluate opportunities for the Company."
"By working with some of the best firms in the industry, we are taking positive and proactive measures, as we have done in the past, to improve our capital structure and the long-term health of our balance sheet," the statement continued. "We have no significant debt maturities coming due in the near term, and we continue to maintain a strong liquidity position. Also, given our strong liquidity position we can confirm that we have not hired any advisors to prepare for an in-court restructuring or bankruptcy.”
The struggling retail chain closed 138 stores in 2017 while restructuring its business to meet shifting consumer tastes. JCPenney announced its plans to close 24 more stores in 2019. Earlier this year, the store announced it would stop selling major appliances at its stores. JCPenney said the decision was made to “better meet customer expectations, improve financial performance and drive profitable growth.”
The Plano, Texas-based company has faced competition from retailers like T.J. Maxx and Marshalls. The company currently operates more than 860 stores and employs 95,000 people.
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The rise of e-commerce outlets has made it harder for traditional retailers to attract customers while forcing them to change their sale strategies. The shift has caused some of America’s most prominent retailers to shutter its stores or declare bankruptcy amid sinking sales in the troubled sector.
FOX Business' Thomas Barrabi contributed to this report.