A group of lenders managing the bankruptcy process of US retail giant JCPenney are reportedly asking interested buyers to up their bids after offers made in July were deemed too low.

According to a report published by Bloomberg, citing people familiar with the matter, lenders are pushing for offers closer to the US$2.2bn of JCPenney’s debt.

Earlier offers are said to have came in at about $1.8bn. If they are not improved the lenders could acquire the company through a credit bid in which they forgive the debt in return for ownership, the report claims.

Among the first round of bidders were private equity firm Sycamore Partners, Hudson’s Bay Company, and Simon Property Group and Brookfield Property Partners, which are making a joint bid, according to a report published by CNBC

Citing the Bloomberg report, CNBC said a bid that saves jobs could be deemed preferable even if the offer is not the most financially valuable proposal.

JCPenney, Brookfield, and Sycamore declined to comment when approached by just-style. Hudson’s Bay did not respond to just-style’s request for comment at the time of going to press.

JCPenney commenced bankruptcy talks with lenders in April after its fourth-quarter net income slid to US$27m from $75m a year earlier. Sales fell 7.7% to US$3.38bn.

It is one of several US retailers to have succumbed to bankruptcy during the pandemic, including Tailored Brands, Ascena Retail Group,  and J.Crew.

Last month, the retailer outlined plans to axe about 1,000 jobs and close 152 stores as it proceeds with plans to emerge from both Chapter 11 and the coronavirus pandemic as a smaller, more financially flexible company.