J.C. Penney on Friday afternoon said it hadn’t hired any advisors to prepare for an “in-courtroom restructuring or financial ruin.” The statement observed a report Thursday evening that the embattled department keep chain had employed advisors to discover debt restructuring alternatives, potentially shopping for it greater time for a turnaround. “As a public business enterprise, we robotically lease external advisors to evaluate opportunities for the Company,” Penney stated in an announcement.
“By running with some of the high-quality firms in the enterprise, we are taking effective and proactive measures, as we’ve got completed in the beyond, to improve our capital structure and the long-term health of our balance sheet. We haven’t any enormous debt maturities coming due in the near term, and we hold to maintain a sturdy liquidity role. Also, given our robust liquidity function, we are able to affirm that we’ve got now not hired any advisors to prepare for an in-court restructuring or financial disaster.”
Penney has roughly $four billion in debt coming due within the next few years, with more than $1.Five billion presently to be had beneath a revolving credit score line, in step with SEC filings. The Plano, Texas-based totally store’s sales preserve to dwindle because the employer hasn’t invested in state-of-the-art tech, current fixtures, and other approaches to attract customers into stores. Penney’s clothing commercial enterprise additionally hasn’t been capable of preserve tempo with fast-style gamers, inclusive of Zara. And the department keeps the area as an entire is bothered, with increasingly consumers buying directly with Nike and Kate Spade brands, bypassing wholesalers.
Luxury department save chain Barneys New York, as an example, is making preparations for a financial disaster submitting that might come as quickly as this month, human beings acquainted have informed CNBC. Nordstrom is trading nearly $20, a percentage lower than a $50-a-share buyout offer it rejected years ago as too low. Saks owner Hudson’s Bay Company is considering going personal after its shares fell nearly 50% in the yr through June. And shares of Macy’s are down forty% thru the beyond a year.
Still pruning its actual property, Penney has said it plans to shut 18 of its department shops in 2019, with extra closures an opportunity if the situation doesn’t enhance. Penney nonetheless operates extra than 800 shops throughout the united states. And a few analysts have expected it can still need to close greater than one hundred.
According to the file on Thursday, Penney spoke with attorneys and bankers who specialize in advising companies on debt restructurings and different monetary workouts in the latest weeks.
Penney shares had been down greater than 17.Five% via Friday afternoon to exchange under $1. The inventory has fallen greater than 60% over the past three hundred and sixty-five days. Shares, which have a marketplace cost of roughly $285.5 million, sank underneath $1 for the primary time in December 2018. The National Development and Reform and Commission and a dozen different primary authorities organizations closing month launched recommendations — made public on the line Tuesday — that for the first time call for the advent of a non-public financial disaster system in China.
The guidelines (link in Chinese) proposed a slow push toward permitting individuals to be forgiven of sure consumer money owed with the aim of sooner or later organizing a complete personal financial ruin device. A non-public financial disaster gadget permits a court docket to claim an insolvent person bankrupt, which permits them some debt relief while they kind out their price range. At the instant, the Chinese mainland handiest has a financial disaster law for companies, even as many different nations and regions have financial disaster systems for individuals. If a corporation is insolvent on the mainland, it could document for financial disaster with the court. However, people cannot do so to be temporarily relieved from their money owed and get hold of a threat to the “upward push from the ashes.”