J.C. Penney Co. Inc. has hired advisers to explore debt restructuring options that would buy more time for the money-losing U.S. retailer to forge a turnaround, Reuters reported. The 117-year-old department store chain’s move represents a high-stakes attempt to get its financial house in order before its cash coffers dwindle and its debt, totaling roughly $4 billion, comes due in the next few years. The Plano, Texas-based company faces fierce competition from discount retailers such as the TJX Cos Inc.’s Marshalls and T.J. Maxx chains, and J.C. Penney has struggled to boost the profile of its e-commerce business to rival established players such as Amazon.com Inc. While J.C. Penney has more than $1.5 billion available under a revolving credit line, investors have continued to sell off the retailer’s shares in response to financial losses. Its credit rating is deep in junk territory, increasing its borrowing costs. The retailer, which employs 95,000 people and operates more than 860 stores, is exploring options that could include raising additional cash or negotiating with creditors to push out debt maturities. Read more.
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.