Blog: JC Penney share price tumbles on cash concerns
Katie Smith | 7 August 2013
Some analysts believe JC Penney could be bankrupt by Labor Day (2 September)
Struggling department store retailer JC Penney has seen its share price tumble after concerns it would close the current quarter with US$1.5bn in cash sparked worry among investors.
The retailer's share price fell 3.9% to $13.28 at the close of play yesterday (6 August) - the lowest level it has been since 2001. And it has continued to fall today, down 2.4% to $12.96 at 2:40 GMT time.
It also comes after rumours circulated that chief financial officer Ken Hannah was considering leaving the company.
The retailer yesterday appointed Debra Berman as senior vice president of marketing, with a focus on "revitalising" the JC Penney brand.
JC Penney last week disputed cash flow concerns by dismissing a report that commercial lender CIT had stopped financing deliveries from smaller manufacturers to its stores as "untrue".
Some analysts previously reported that the department store retailer could be bankrupt by Labor Day (2 September) if it continues to lose money at its current rate.
The Plano, Texas-based company, however, secured a five-year US$2.25bn loan in May - $500m more than it originally expected - to provide it with the "financial flexibility" to pursue plans to turn the business around under CEO Mike Ullman.
Ullman, who returned to JC Penney in April - replacing Ron Jonhson - has outlined plans to improve the ailing business, which include better marketing, connecting with core customers as well as attracting new ones, getting the right mix of products and strengthening the online business.
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