September 20, 2013 / 9:55 PM / in 5 years

J.C. Penney in talks to raise more money: report

(Reuters) - J.C. Penney Co Inc (JCP.N) is in talks to potentially raise more money while it tries to revive its flagging business, Bloomberg News reported on Friday, citing people with knowledge of the matter.

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

Penney is being advised by Goldman Sachs, according to one person cited by Bloomberg. Goldman this spring arranged a $2.25 billion loan for the department store chain to shore its finances after a precipitous drop in sales last year.

Penney has been struggling after a failed attempt in 2012 to remake itself into a trendier store led to a 25 percent drop in sales. Penney has brought back the heavy discounting that was its hallmark to win back customers it lost, but sales again declined in the quarter that ended in August.

A spokesman for Goldman Sachs declined to comment, while representatives for Penney did not immediately return requests for comment.

Bloomberg said one option Penney is considering is to borrow money against its real estate.

Penney said when it reported quarterly results last month that it expected to end the fiscal year with $1.5 billion in cash.

Separately, Vornado Realty Trust (VNO.N) disclosed on Friday it had sold off its entire stake in Penney, a move it had said last week it would make.

Penney shares fell 1 percent to $12.80 in after hours trading.

Reporting by Phil Wahba and Olivia Oran in New York; Editing by Richard Chang

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