In early April, J.C. Penny CEO Ron Johnson stepped down following over one year of dismal financial results at the company. Johnson had attempted to turn the department store business on its head, eschewing sales and coupons in favor of consistently lower pricing, but the company's board was forced to make changes due to a plummeting stock price and an estimated $3.5 billion debt.
It seems, however, that not everyone has written off J.C. Penney. Investment bank Goldman Sachs has issued a five-year $1.75 billion loan to the troubled department store. J.C. Penney stated that the funds will be used to fund "ongoing working capital requirements," "general corproate purposes," and part of its debt. The loan is secured by real estate and interest in J.C. Penney.
"This loan facility is an important component of our strategic plan to strengthen the Company's financial position," said Ken Hannah, CFO of J.C. Penney. "Together with our revolving credit facility, this will give us the financial strength we need to meet our current funding requirements and build toward a successful future."
This loan is in addition to the $850 million that J.C. Penny borrowed from a revolving credit fund two weeks ago. The company stated that loan would go toward ensuring the company's liquidity and to replenish inventory at its stores.