Plano, TX—Although the United States government may face default Thursday should the U.S. Congress fail to pass a compromise debt ceiling measure today, one of America’s largest—and struggling—retailers has experienced its own financial disruption this week.
On Tuesday, JCPenney had to deny a rumor that swept through financial markets that the department store had hired bankruptcy counsel ahead of a Chapter 11 filing. The retailer’s factors had also supposedly tightened terms, too.
Source of False Rumor ‘Unclear’
JCPenney spokesperson Kristin Kays said there was “no truth to the rumor,” origins of which were unclear.
Despite the denials and lack of evidence, JCPenney’s stock took another beating, falling 9% to $7.17 a share.
Ironically, the bankruptcy rumor came as JCPenney reported that GC Capital Retail Bank had extended its agreement to run the retailer’s branded credit card program for another six years, extending marketing and services until Feb. 1, 2020.
Earlier this month, Penney closed a public offering of new shares that raised $785 million in a move partly meant to reassure suppliers and their financiers that it had enough cash for holiday and beyond.
Only last week, JCPenney reported that it expected to have $2 billion in liquid assets at the end of its fiscal year and that it expected sales trends to continue improving through the end of the year.