JC Penney Hires Blackstone for Cash Infusion

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Published April 12, 2013

| FOXBusiness

J.C. Penney (JCP) has hired Blackstone Group (BX) to advise how to best turn the company around financially in a move that could include raising $1 billion in cash, according to a report by The Wall Street Journal.

While bond analysts don’t think the ailing retailer will be able to generate enough revenue to sustain operations for much longer than a year, Bill Ackman, who owns 18% of Penney’s shares, has said major shareholders are willing to put up more capital.

Other options might be selling a minority stake or acquiring a loan to address near-term needs such as funding the continued restructuring, according to reports.

Penney has been unable to stem a decline in sales and last year posted a loss of nearly $1 billion.

Earlier this week, Penney fired its CEO, Ron Johnson. Poached to much fanfare from Apple (AAPL) in November 2011 to lead a massive overhaul, Johnson’s “no sales” promise proved a huge disappointment. He was replaced by former chief Mike Ullman.

The management back-tracking has been met with mixed reviews from analysts and investors. While some have called him a strong choice, others have expressed concerns in his ability to steer Penney through these perpetually turbulent times.

Shares of Penney, meanwhile, are down about 2.5% to $14.50 on Friday morning and have fallen more than 25% since the beginning of the year.

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http://www.foxbusiness.com/news/2013/04/11/jc-penney-hires-blackstone-ackman-willing-to-put-up-capital/