- JCPenney stock soared as much as 59% on Friday after the company, which has reportedly been considering bankruptcy, avoided defaulting on its debt with a $US17 million interest payment.
- Several retail giants including J. Crew and Neiman Marcus have already entered default as the coronavirus pandemic wipes out demand.
- The company’s shares were halted after the market open. JCPenney stock has since relinquished some gains.
- Watch JC Penney trade live here.
JCPenney shares spiked as much as 59% on Friday after the retailer made a $US17 million interest payment to avoid default.
The company was scheduled to make an interest payment on May 7 and used a five-business-day grace period to consider alternatives, according to a Friday regulatory filing. JCPenney has reportedly been considering bankruptcy and continues to weigh “strategic alternatives,” the filing said.
The retailer’s stock was halted at the market open before soaring as high as 31 cents per share. Shares have since pared some gains and traded at 25.19 cents as of 12:15 p.m. ET.
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Several retailers have filed for bankruptcy over recent weeks as the coronavirus pandemic saps demand. J. Crew announced on May 4 it filed to begin bankruptcy proceedings. Neiman Marcus filed for bankruptcy just three days later, citing the pandemic and lofty debts for the move.
Friday’s interest payment doesn’t get JCPenney out of the woods. Prolonged lockdowns still weigh on the company’s revenue stream, and the company is still in the middle of a major overhaul. JCPenney hired six executives to lead a company-wide turnaround in February.
The company’s market cap is down more than 99% from its late-1990s peak as e-commerce’s rise eats away at the physical retail sector.
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