JCPenney Denies It’s Having Credit Problems

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

JCPenney Denies It’s Having Credit Problems

JCPenneyPromo JCPenney Denies It's 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department store chain denied a Wednesday report in the New York Post that indicated that the CIT Group (CIT[4]) had withdrawn financing to its suppliers.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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/09/JCPenneyPromo.jpg
  2. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  3. shot down the latest rumors regarding its financial condition: http://hosted.ap.org/dynamic/stories/U/US_JC_PENNEY_CIT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-08-01-07-37-45
  4. CIT: http://studio-5.financialcontent.com/investplace/quote?Symbol=CIT
  5. it ousted CEO Ron Johnson: http://investorplace.com/2013/04/ackman-finally-realizes-that-jcpenney-hit-rock-bottom-now-what/
  6. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  7. a $1.75 billion, five-year senior secured loan: http://investorplace.com/2013/04/jcpenney-gets-1-75-billion-loan-from-goldman-sachs/

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