JCPenney Co. Inc. (Plano, Texas) has issued a statement of assurance that it has plenty of money to pay its suppliers, and that a report that some of its suppliers are not getting paid is false.
The New York Post had reported yesterday report that CIT Group Inc. (New York), a bank holding company and commercial lender, had ceased supporting deliveries from small manufacturers to JCPenney’s stores. The newspaper didn’t name its source.
“Contrary to the news report, CIT continues to factor and support deliveries from JCPenney suppliers,” the retailer said in a statement. JCPenney “continues to have ample liquidity to manage its business with expectations to close the quarter with approximately $1.5 billion in cash on its balance sheet.”
JCPenney also said that merchandise factored by CIT represents less than 4 percent of its overall inventory for the year.
CIT cut off funding to suppliers of Sears Holdings Corp. (Hoffman Estates, Ill.) in 2012. Those vendors made up less than 5 percent of sales, Sears said at the time.
JCPenney is seeking to rebound from its worst sales year in more than two decades. Revenue last year tumbled 25 percent, leading to a net loss of $985 million, after the much-publicized failure of the Ron Johnson makeover effort. Johnson was fired in April, and former and new ceo Myron Ullman is working to shore up the company’s finances and increase promotions to lure back shoppers. JCPenney will report its first full quarter under Ullman’s new tenure next month, though a date hasn’t been set yet.