J.C. Penney Denies Credit Problem with CIT
PLANO, Texas-Responding yesterday to various press reports, J.C. Penney said it is "untrue" that CIT Group, which factors some of the department store's vendors, had stopped funding on some future merchandise shipments to the company.
In a statement issued yesterday, J.C. Penney said it was told directly by CIT that the commercial credit provider "continues to factor and support deliveries from J.C. Penney suppliers. In fact, J.C. Penney continues to have the support of all of its key vendors, who have maintained their shipments to the company."
The statement was a response to a story that appeared yesterday in the New York Post--versions of which also appeared on several wire services--which stated that CIT "has abruptly stopped financing deliveries from smaller manufacturers to Penney stores." The press accounts cited the story in noting that, in trading on the New York Stock Exchange yesterday, J.C. Penney shares fell from an opening of $15.51 to a close of $14.58.
J.C. Penney also said CIT-factored merchandise currently represents less than 4 percent of its overall inventory for the year. The retailer "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."
Contacted yesterday by HFN, CIT refused to comment on the story.