US: JC Penney extends credit facility to $1.85bn
US department store retailer JC Penney has amended its bank credit facility to increase its borrowing capacity, raising concerns about its ongoing transformation strategy.
The Plano, Texas-based company has increased its borrowing capacity by US$100m to $1.85bn, with the option to borrow an additional $400m.
JC Penney said the amendment enhances its liquidity and provides additional financial flexibility to support its transformation initiatives.
CFO Ken Hannah said: "As we enter the second year of our transformation, today's announcement reflects the confidence of our banking group in our long-term strategy and further strengthens our liquidity position as we continue to execute our plan."
The arrangement of the credit facility was led by JP Morgan Securities, Bank of America Merrill Lynch, Barclays Capital and Wells Fargo Capital Finance.
JC Penney revealed a series of initiatives to revamp its business last year, including a new pricing strategy, plans to re-invent the in-store experience, new brand identity, and a number of new brands.
However, the company said its third-quarter sales continued to slide, despite ongoing efforts to turn around its business.
Last week, the retailer remained coy on reports it is to axe a further 300 jobs at its headquarters. The reports came after the company axed around 600 jobs at its corporate headquarters last April. Three months later, it cut another 350 jobs at its HQ as part of an ongoing restructuring of its business.
The group is expected to release its fourth-quarter and full-year results later this month.
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