J.C. Penney Co. Inc. has retained investment and advisory firm Blackstone Group to determine ways shore up its rapidly dwindling balance sheet, according to a source with knowledge of the arrangement.
The ailing department store, now once again under the leadership of chief executive officer Myron “Mike” Ullman 3rd, is scrambling after burning through more than $900 million in free cash flow last year as former ceo Ron Johnson tried to remake the chain. Penney’s is said to be looking for a private equity fund that would want to invest in the retailer. RELATED STORY: Dissecting Ron Johnson's Tenure at J.C. Penney >>
A company spokeswoman declined to comment on whether it had hired Blackstone and a spokesman for the advisory firm also declined comment.
But Penney’s has been getting some outside help lately.
“Over the last several months or more, we have engaged outside advisers to provide us with their expertise about how to best position the company from a financial standpoint during the company’s transformation,” the Penney’s spokeswoman said. “It is safe to assume this will continue as part of the work now under way as we develop a game plan for the company going forward.”
Penney’s has a $1.85 billion credit facility that it can draw on to fund operations as well as valuable real estate that it could sell and no debt coming due until 2015. But observers say one of Ullman’s most important first tasks is to reassure jittery vendors, investors and lenders about the company’s financial health.
William Ackman, the activist investor who helped install Johnson as ceo and supported his transformation efforts, told WWD Tuesday that he was sticking by the company. “We’re not going anywhere,” said Ackman, who controls 39.1 million shares of Penney’s, or 17.8 percent of those outstanding. “In fact, we’re going the other direction. We’re digging in.”
The Wall Street Journal first reported that Penney’s hired Blackstone on its Web site late Thursday. The Journal reported Penney’s was seeking to raise up to $1 billion.
A room full of toiles at the haute couture atelier in the Dior exhibition at Les Arts Décoratifs, open in Paris since July 5. This is just one of three major exhibitions that have been timed to coincide with the house's 70th anniversary. See the rest of the exhibits, plus read WWD's look into the iconic brand's history. Link in bio. #wwdfashion (📷: @dominiquemaitre)
For spring, Pamplemousse's Danica Zheng presented her signature slip dresses attached to a white T-shirt along with floral windbreakers, off-the-shoulder cotton blouses and more. For more highlights from the New York trade shows, go to WWD.com. #wwdfashion
The Green Carpet Fashion Awards closed out Milan Fashion Week yesterday. The fashion industry flocked to the event, showing its efforts to support and spread the message of sustainability. Supermodel Gisele Bündchen said "if each one of us took at least one step is this direction, there is no saying how much could be done." #wwdeye #wwdfashion #mfw (📷: Lodovico Colli di Felizzano)
Etro’s show, titled “The Tree of Life,” was a celebration of the house’s 50th anniversary. “My father founded the company in 1968, which was the year of counterculture and psychedelia. It’s really a show that celebrates that and the paisley design of India and its origin,” said Veronica Etro. #wwdfashion #mfw #ss18 (📷: @delphineachard)
For @msgm’s spring 2018 show, creative director @massimogiorgetti said “Words, sounds, colors. Synthesis and therapy of a collection,” were the inspirations behind the collection, showing today. Read the rest of Milan spring 2018 inspirations on WWD.com. #mfw #wwdfashion #ss18
For her first solo album in over 10 years, Fergie tapped Carine Roitfeld, Mert and Marcus, Giovanni Bianco and more to create a fashion-focused video approach for the record, Double Dutchess. "Giovanni really helped me get back in touch with my tomboy side, my hardside," said the singer. #wwdeye #wwdfashion ( : @slovekinpics)