J.C. Penney Says Certain Lenders Ready To Accept Conditional Business Plan, Stock Surges
Historic departmental store chain J C Penney Company Inc (OTCMKTS:JCPNQ) has been in all sorts of trouble over the course of the past few years due to its mounting debts and disappointing sales growth. Eventually, the company filed for bankruptcy protection recently.
However, on Tuesday, the stock rose by as much as 6% after the company made positive noises regarding a fresh business plan. The company revealed that some of its lenders have agreed to accept J.C. Penney’s new business plan subject to certain conditions. The departmental store operator is looking for ways to emerge from bankruptcy protection and as per a regulatory filing; it has until July 31 to meet certain conditions.
The news came as a boost for the company stock and investors soon piled into it. Considering the fact that the deadline is fast approaching, investors could do well to keep a keen eye on the developments surrounding J.C. Penney. It is likely that the stock is going to be on the radars of many investors over the course of the coming days. There have been other important developments in recent times as well and that could also have been a factor behind the positivity around J.C. Penney’s business plan.
The company announced last week that it was going to cut as many as 1000 jobs and also close down as many as 152 stores in order to restructure its business. The job cuts are primarily going to be made up of personnel in field management, corporate, and international roles. That being said, the company did state that the employees who are being let go are all going to get severance packages. J.C. Penny is also currently in discussions with its landlords with regards to the store closures.
It has been a remarkable fall from grace for J.C. Penney which had been one of the top departmental stores in the United States for many decades and dominated the industry in the 1990s. As a matter of fact, it was the first company of its size to start offering its product online. However, rising competition in the online shopping space pushed the company hard and it found it difficult to hold its own.
The coronavirus pandemic was a further strain on the company and its debt pile that amounted to as much as $3.7 billion. J.C. Penney operated 850 stores in Puerto Rico and the United States at the time.
Earlier on in July, the company had asked the bankruptcy court for more time with regards to its future negotiations. The court had also allowed it to delay rent payments until July 13. It is important for investors to keep an eye on the myriad developments if they are looking to invest in the stock.
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