JCPenney Stock Falls Below $1 For First Time
NEW YORK (CBSDFW.COM/CNN BUSINESS) - As the Dow posted its biggest daily point gain ever (1,086 points), JCPenney's stock fell below $1 for the first time since it started trading in 1929.
The 110-year-old Plano-based company hasn't been profitable since 2010.
JCPenney is $4 billion in debt with a junk credit rating.
With few shoppers coming to stores, JCPenney has been forced to offer steep discounts on clothing to clear its massive inventory glut.
Last month, JCPenney reported a $151 million third-quarter loss and a 5.4 percent drop in sales. The stock has fallen 68 percent this year and nearly 30 percent in December alone.
Jill Soltau, formerly the boss of Jo-Ann Stores, became CEO in October — the company's fourth in six years.
The company's leaders said they are considering closing some of JCPenney's remaining 860 stores.
The company has a $2.1 billion debt payment due in 2023. Wall Street analysts are skeptical about JCPenney's ability to repay that money.
A spokeswoman for JCPenney declined to comment to CBS 11 or CNN.
The company lost shoppers to cheaper sellers a decade ago and struggled to bring them back as the economy began to rebound.
JCPenney plowed through its cash reserve in an expensive makeover after it hired former Apple Store chief Ron Johnson as its CEO in 2011. The plan didn't work and Johnson was fired after 17 months on the job.
It lacked the cash to improve stores, buy trendy merchandise or hire more employees.
The company switched its focus several times over the past few years: from older shoppers to younger, trendier ones, back toward middle-aged women.
JCPenney has recently changed its merchandising strategy, chasing proven sales trends instead of filling up stores with inventory. It started selling appliances a few years ago, but that strategy hasn't paid off either.
(The-CNN-Wire™ & © 2018 Cable News Network, Inc., a Time Warner Company contributed to this report. All rights reserved.)
