JCPenney Denies It’s Having Credit Problems

by Christopher Freeburn | August 1, 2013 8:50 am

JCPenneyPromo JCPenney Denies Its Having Credit Problems[1]Shares of JCPenney (JCP[2]) surged more than 6% in pre-market trading on Thursday after the struggling retailer shot down the latest rumors regarding its financial condition[3].

The discount department store chain denied a Wednesday report in the New York Post that indicated that the CIT Group (CIT[4]) had withdrawn financing to its suppliers. CIT provides cash advances to suppliers who sell merchandise to retailers. Stopping those cash advances would be a signal that the lender was concerned about the retailer’s creditworthiness, the Associated Press noted.

JCPenney said that less than 4% of its merchandise is provided by CIT-financing suppliers. It added that CIT had also denied the report.

The battered retailer is attempting to reverse course after a series of disastrous quarters. Earlier this year, it ousted CEO Ron Johnson[5], whose “no sales” strategy bombed with customers.

In May, JCPenney received a vote of confidence from Goldman Sachs (GS[6]), when the bank extended a $1.75 billion, five-year senior secured loan[7] to the retailer.

  1. [Image]:
  2. JCP:
  3. shot down the latest rumors regarding its financial condition:
  4. CIT:
  5. it ousted CEO Ron Johnson:
  6. GS:
  7. a $1.75 billion, five-year senior secured loan:

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