J.C. Penney Co. Inc. has been racing to secure the financing it needs to see it through a bankruptcy.
The company has been racing to secure the financing it needs to see it through a bankruptcy, but as of 6 p.m. on Wednesday did not have a debtor-in-possession loan lined up even though it is seen as filing for Chapter 11 protection on Thursday or Friday.
Penney’s started skipping interest payments on April 15, beginning a 30-day grace period the company used to scramble for “strategic alternatives” as its turnaround ran headlong into the coronavirus consumer shutdown. Retail routinely has a few companies on the edge and just barely holding on, but Penney’s plight marks an unusual shakeout in an extraordinary time that saw both Neiman Marcus and J. Crew Group slip into insolvency last week.
Having a small kitty going into bankruptcy would leave Penney’s with less room to maneuver. Neiman Marcus Group went into Chapter 11 with a $675 million DIP package for its business, which draws $4.7 billion in annual revenues, while J. Crew’s DIP totaled $400 million for its $2.5 billion business.
Chief executive officer Jill Soltau always faced something of a tough way forward with Penney’s, but was generally seen as having more time to prove the company could be turned around. She sought to sharpen the business with less inventory and five distinct lifestyle shops in the women’s department, new outdoor-oriented shops and more.
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