JC Penney will receive $1.75B in a loan from Goldman Sachs, according to reports out this week.
- (PHOTO:REUTERS/Rick Wilking)
The huge 5 year loan will be taken to help the company with its operational costs, and cover a large chunk of its increasing debt.
News of the loan had in fact been rumored from some outlets as early as last Friday, but the struggling company did not confirm the reports were true until Monday.
Just days ago, George Soros revealed that he had taken a 7.9 percent stake in the retailer. That news means that the billionaire financier will become the fourth largest shareholder at the company.
Earlier this month J.C. Penney also reported that it would be borrowing $850 million to help boost its inventory, as well as helping out with its general running of operations.
At that time the J.C. Penney Chief Financial Officer said: "As we near completion of the home department transformation in over 500 stores, we have been undertaking and will continue to experience a significant inventory build and increase in capital expenditures.
"The draw under our revolver today provides more than our current funding needs to ensure our continued liquidity. Moreover, we will continue to explore additional capital raising alternatives with the assistance of our financial advisors."
Former CEO Ron Johnson has taken a lot of the criticism for the current predicament of the company, and now new Chief Executive Officer Myron Ullman has been installed to try and work the company out of its problems.
Recently the problems faced by the company have led to price increases on a number of the outlet's products. According to Bloomberg, new CEO Ullman has increased the price of a pair of Dockers from $35 to $58.
Many blame Johnson for not understanding the J.C. Penney brand when he ditched coupons and special deals at the retailer. However, since his departure it has been rumored that the company's famous sales and coupons would be making a return.