JCPenney struts back to financial health
The retailer has a big liquidity cushion and its sales are growing after it escapes bankruptcy
New York — JCPenney landed in bankruptcy court after foundering during the pandemic, but the reorganised retailer now sports a big liquidity cushion and its sales are growing.
The company has more than $1.2bn of cash and credit availability, interim CEO Stanley Shashoua said in an interview. And the 119-year-old company, whose financials are no longer public, has improved sales since it left bankruptcy in December.
“We are very pleased to be running ahead of plan,” Shashoua said. “With improving sales and cash flow, and a strong liquidity position, we are turning our focus from stabilisation to growth and we’re excited about JCPenney’s opportunities.”
JCPenney, which entered chapter 11 bankruptcy last May as the pandemic collided with its struggling turnaround plan, was part of a wave of retail bankruptcies tied to the pandemic. More than three dozen clothing sellers have sought to reorganise in 2020 and 2021, including Ann Taylor parent Ascena Retail Group, Francesca’s Holdings and Neiman Marcus Group.
Since then, retailers have enjoyed a sales boom as Covid-19 restrictions ease and consumers spend cash from stimulus cheques. Data last month showed retail sales hitting a record high in March. Yet they have also had to contend with sluggish supply chains and vendors reluctant to advance shipments after taking losses in 2020.
JCPenney closed about 150 stores as part of its restructuring, leaving about 670. Last week the company cut 650 jobs. A spokesperson called the layoffs “a necessary step to ensure the long-term success of our company”.
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