by Christopher Freeburn | April 30, 2013 11:53 am
Goldman Sachs (NYSE:GS) is providing much-needed financing to JCPenney (NYSE:JCP).
The struggling retailer will receive a $1.75 billion, five-year senior secured loan from the Wall Street bank. The loan is backed by the chain’s assets and real estate holdings, the Associated Press notes.
After posting disappointing quarterly results, JCPenney fired CEO Ron Johnson earlier this month. Johnson’s attempt to move the retailer away from sales and discounts bombed with customers, who fled the chain in droves.
With sales down sharply, JCPenney has been tapping its revolving credit lines to fund daily operations. It recently announced that it would use $850 million from a credit line to acquire new merchandise to keep store shelves filled.
This week, the retailer also conceded that the renovations to its new home goods in-store boutiques are taking longer than expected, delaying the launch of the departments by as much as a month.
In addition to Goldman Sachs, at least one other major investor has given JCPenney a vote of condense. Last week, George Soros’ investment fund revealed that it had acquired a 7.9% passive stake in the retailer.
Shares of JCPenney fell about 1% in Tuesday morning trading.
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