by Christopher Freeburn | August 1, 2013 8:50 am
Shares of JCPenney (JCP) surged more than 6% in pre-market trading on Thursday after the struggling retailer shot down the latest rumors regarding its financial condition.
The discount department store chain denied a Wednesday report in the New York Post that indicated that the CIT Group (CIT) had withdrawn financing to its suppliers.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, whose “no sales” strategy bombed with customers.
In May, JCPenney received a vote of confidence from Goldman Sachs (GS), when the bank extended a $1.75 billion, five-year senior secured loan to the retailer.
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