Penney Said to Hire Blackstone to Help Raise Cash
J.C. Penney has had a disaster of a turnaround, unable to raise sales and bleeding revenue quarter after quarter. Their former CEO, Ron Johnson, was ousted as a result of his poor performance. His efforts to redefine the shopping experience failed to bring in new consumers and were a proven failure. Before being removed, Johnson reversed course on his entire plan to lower prices of goods to improve the shopping experience.
Now, J.C. Penney is spending all of their cash reserves at an alarmingly rapid pace. Thus, J.C. Penney is reaching out to Blackrock to raise cash needed to continue the turnaround effort. J.C. Penney has also resorted to their old CEO, Myron E. Ullman III. Even with all of these changes, it may be too late however. The turnaround of Ron Johnson’s vision spent much of J.C. Penney’s cash, and the reserves are running low.
I have been hearing about the floundering of J.C. Penney for a while, and now I am definitely on the side that it will not be able to have a good turnaround. Even if it manages to survive, the company is not going to be restored in any significant manner. The real issue will be when the company is facing the problem of paying back debts in 2015, and I would not be surprised if the company actually faces bankruptcy.