Penney reported to see no need to raise cash, shares jump

Thu Sep 26, 2013 4:55pm EDT
 
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By Siddharth Cavale

(Reuters) - J.C. Penney Co Inc (JCP.N: Quote) Chief Executive Myron Ullman told investors he does not see the need to raise cash this year, CNBC reported, reversing a sharp fall in the retailer's shares.

J.C. Penney shares jumped 18 percent from their early morning low after CNBC reported Ullman's comment, citing a source. (link.reuters.com/huq43v)

The shares fell 15 percent on Wednesday after Goldman Sachs said Penney's sales would likely grow more slowly than expected.

That added to concerns the company may not be able to boost its cash reserves ahead of the crucial holiday season when it needs to buy merchandise, advertise and hire staff.

Reuters, citing sources, reported on Wednesday that J. C. Penney was looking to raise up to $1 billion in new equity.

A J. C. Penney spokeswoman declined to comment on Ullman's reported statement but said vendors were still supportive of the company's efforts to turn its business around.

The company said earlier on Thursday it was pleased with the progress of its turnaround efforts and still expected positive comparable-store sales trends coming out of the third quarter and throughout the fourth.

Penney's sales fell 25 percent last year after former Chief Executive Ron Johnson eliminated coupons and jettisoned merchandise that was popular with long-time customers in a push to present a trendier image for the 111-year-old retailer.   Continued...

 
Customers ride the escalator at a J.C. Penney store in New York August 14, 2013. REUTERS/Brendan McDermid