Bloomberg reports that JC Penney has approached consulting firm AlixPartners LLP as the US retailer looks at options for managing its debt. Brick-and-mortar retailers are struggling to keep up with the shift to online shopping, and the crisis has been exacerbated by the COVID-19 outbreak which has forced them to shutter stores and furlough employees.
JC Penney has been in talks with lenders in recent weeks about its liquidity needs and negotiating a possible debt deal, the report said. The retailer had $3.72 billion in borrowings as of Feb. 1, its latest annual filing showed, with cash and cash equivalents of $386 million. Its 2019 sales fell 8 per cent to $10.72 billion from the previous year.
The company's combined credit score, which measures on a scale of 100 to 1 how likely a company is to default on its debts in the next year, was ‘1’, according to Refinitiv Eikon data, indicating it was expected to default.
