Shares of J.C. Penney Co. jumped 6 percent Monday to 62.8 cents in after-hours trading following the retailer’s disclosure that its non-executive chairman Ronald Tysoe purchased 1 million shares of the company.
Tysoe purchased the shares at 59 cents each, bringing his total number of Penney’s shares to 1,352,128.
The retailer’s stock is in jeopardy of being delisted from the NYSE. Penney’s must pull up its average closing share price over a 30-day period to above $1 to remain listed.
NYSE’s rules give companies either a six-month window to get back in line, or until the next annual stockholder meeting if they decide to proceed with a reverse stock split, an option the retailer is considering. A reverse stock split would effectively divide its outstanding shares to increase share price while keeping its market capitalization steady. To do that, the company would need stockholder approval during their annual meeting.
Tysoe is also on the board of Cintas Corp. and Taubman Centers Inc. Earlier in his career, he was vice chairman for finance and real estate at Macy’s Inc. and a senior adviser at Perella Weinberg Partners LP. Tysoe was also president and chief operating officer of the former Campeau Corp., which purchased both Federated and Allied and later took them into Chapter 11 bankruptcy. Tysoe was integral in the restructuring.
Penney’s is involved in a restructuring of its own, involving refinancing its debt, lowering costs, managing inventories better, and changing its merchandising to return to sales and profit growth and resonate more with its middle-income, mid-American customer base. Last week, after Macy’s unveiled a pilot program at 40 stores with online consignment retailer ThredUp, Penney’s followed suit with a similar partnership in 30 of its locations. Secondhand handbags and women’s fashion are now available in branded ThredUp spaces within select Penney’s stores.
Penney’s narrowed its net loss to $48 million, or 15 cents per share in the quarter ended Aug. 3, compared with a net loss of $101 million, or 32 cents per share in the same period last year. Net sales decreased to $2.51 billion from $2.76 billion a year earlier. Comparable sales fell 9 percent.