66.7 F
Fort Worth
Thursday, September 24, 2020
- Advertisements -
Business Penney draws $850 million on credit line to fund changes

Penney draws $850 million on credit line to fund changes

Other News

Petalo, not Charmin: Virus brings Mexican toilet paper to US

By JOSEPH PISANI AP Retail Writer NEW YORK (AP) — Toilet...

Mall owners close to buying JC Penney out of bankruptcy

By ANNE D'INNOCENZIO AP Retail WriterNEW YORK (AP) — Mall owners Simon Property Group and Brookfield Property Partners are close to a...

At Home launches collection with Fort Worth connection

At Home Group Inc. (NYSE: HOME), The Home Décor Superstore, has debuted an exclusive collection with interior...

Former Toys ‘R’ Us reopens as Havertys in Southlake

HAVERTYS (NYSE: HVT and HVT.A) will officially open its new store in Southlake Corners on Friday, August 21, 2020. The 32,300 square...
Robert Francis
Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

NEW YORK (AP) — J.C. Penney Co. says it has drawn $850 million from its $1.85 billion revolving credit line, a clear sign that the flailing department store chain is in a severe cash crunch after a turnaround plan launched early last year resulted in disastrous results. The Plano, Texas-based department store chain says that proceeds will be used to fund working capital requirements and expenditures including stocking up inventory for a newly overhauled home area. The new home area is being rolled out to 500 of its 1,100 stores by next month. The company says the drawing of the funds provides more than its current funding needs to ensure continued liquidity, but it is also looking to explore other alternatives to raise more money. The latest development comes a week after it fired CEO Ron Johnson after 17 months on the job. Johnson spearheaded a costly turnaround plan that included getting rid of most discounts, bringing in hip brands and transforming the stores into collections of mini-boutiques. But shoppers were turned off, resulting in a nearly billion-dollar loss and a 25 percent drop in revenue for the latest fiscal year. Penney rehired Mike Ullman, who had been its CEO for seven years until he was replaced by Johnson. Now, , he’s trying to stem the bleeding of sales, while looking to bolster its cash as Penney is in the middle of building its mini-shops. In early February, Penney had amended its bank credit facility to increase its borrowing capacity to $1.85 billion, but analysts had expected that it wouldn’t tap into the credit line until the middle of the year. “This shows that Penney is burning through cash quicker than anyone expected,” said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisers. Shares of Penney are down 1 percent, or 17 cents, to $14.45 in premarket trading. The stock has lost more than 65 percent of their value since February 2012 when investors were bullish about Johnson’s plan

 

- Advertisements -
- Advertisements -

Latest News

Mars drops Uncle Ben’s, reveals new name for rice brand

By ALEXANDRA OLSON AP Business WriterNEW YORK (AP) — The Uncle Ben's rice brand is getting a new name: Ben's Original.Parent firm...

Trump says new TikTok headquarters could land in Texas, but questions about the deal remain

By Dan Rosenzweig-Ziff, The Texas Tribune Sept. 22, 2020 "Trump says new TikTok headquarters...

Powell and Mnuchin voice optimism but back more economic aid

By MARTIN CRUTSINGER AP Economics Writer WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin...

Wall Street steadies itself, halting 4-day losing streak

By STAN CHOE, DAMIAN J. TROISE and ALEX VEIGA AP Business Writers Stocks on Wall Street shrugged off an...

Powell: Many small companies can borrow without Main Street

By CHRISTOPHER RUGABER AP Economics WriterWASHINGTON (AP) — Federal Reserve Chair Jerome Powell says that many mid-size U.S. businesses are now able...