JCPenney CEO Touts $1.2 Billion Cash Buffer After Bankruptcy
Eliza Ronalds-Hannon | Bloomberg
(Bloomberg) — JCPenney landed in bankruptcy court after foundering during the pandemic, but the reorganized retailer now sports a relatively big liquidity cushion and its sales are growing.
The company has more than $1.2 billion of cash and credit availability, interim Chief Executive Officer 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 stabilization to growth and we’re excited about JCPenney’s opportunities.”
JCPenney, which entered Chapter 11 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 reorganize in 2020 and 2021, including Ann Taylor parent Ascena Retail Group Inc., Francesca’s Holdings Corp. and Neiman Marcus Group Inc.
Since then, retailers have enjoyed a sales boom as Covid restrictions ease and consumers spend cash from stimulus checks. Data last month showed retail sales hitting a record high in March. Yet they’ve also had to contend with sluggish supply chains and vendors reluctant to advance shipments after taking losses last year.
JCPenney closed around 150 stores as part of its restructuring, leaving around 670. Last week, the company cut 650 jobs. A spokeswoman called the layoffs “a necessary step to ensure the long-term success of our company.”