Reports have emerged that J.C. Penney Co. Inc. (NYSE: JCP) has hired advisers to help restructure its debt in a bid to revive its business and avoid bankruptcy. A statement from the company says that J.C. Penney’s restructuring efforts are in the early stages and the goal is to provide the retailer with more financial flexibility. The company is reportedly considering a number of strategic options, including possibly raising additional cash.
J.C. Penney has about $4 billion in debt that will mature in the coming years, with more than $1.5 billion currently available under a revolving credit line. A restructuring could involve delaying those maturities. The company apparently has been talking with lawyers and bankers who specialize in advising troubled companies on debt restructurings and other financial workouts about possible actions to take.
Over the years, the company hasn’t been able to keep pace with all of the changes that have hit the retail industry. J.C. Penney has steadily been losing market share to fast-fashion players such as Zara and online retailers like Amazon. Since late 2018, the stock has traded below or slightly above $1. After this latest news, the company’s shares fell 17 percent to close at 90 cents. The stock has fallen more than 60 percent over the past 12 months.
In October, J.C. Penney hired former Jo-Ann Stores CEO Jill Soltau as its new top executive to turn around its struggling business. Soltau has been focused on building her management team and getting rid of unprofitable items to streamline the stores’ inventory. J.C. Penney currently employs about 95,000 people at more than 800 stores. The company is considering shutting 18 of its department stores in 2019, with additional closures a possibility if the situation doesn’t improve.