Wall Street has been taking a second look at J.C. Penney in the weeks since controversial CEO Ron Johnson stepped down.
J.C. Penney said Monday that it secured a $1.75 billion loan from Goldman Sachs (GS). The announcement confirms reports late last week that that the retailer was nearing a financing deal with Goldman.
Investors were also encouraged Monday by a report in the New York Post that two major hedge funds had invested in J.C. Penney.
The loan from Goldman comes weeks after J.C. Penney announced that Johnson was stepping down as chief executive after just a year and a half.
Johnson, a former Apple (AAPL) executive, had embarked on an ambitious turnaround plan for J.C. Penney by transforming the department store chain into a collection of boutiques. He ditched older brands and announced plans to eliminate checkout counters in favor of mobile and self-checkout.
The results were dismal. J.C. Penney has been suffering steep losses, bleeding $427 million in the fourth quarter as sales fell 28% versus a year prior.
Johnson was replaced by his predecessor, Mike Ullman, who ran J.C. Penney for seven years prior to Johnson's arrival.
The loan from Goldman is an important part of the company's plan to strengthen its financial position, said J.C. Penney CFO Ken Hannah.
"This will give us the financial strength we need to meet our current funding requirements and build toward a successful future," Hannah said in a statement.
The five-year loan agreement with Goldman is in addition to the $850 million that J.C. Penney drew from its own $1.85 billion revolving credit facility earlier this month.
J.C. Penney said the money will be used as to meet ongoing capital needs and pay down debt.
Despite the recent rally, shares of J.C. Penney remain down 12% so far this year.
On StockTwits, some investors voiced concern about the company's long-term strategy as consumers continue to favor online retailers.
Others were more optimistic, calling for further gains in J.C. Penney stock.
Meanwhile, the leadership change at J.C. Penney raises questions about the investment strategy of Bill Ackman, the hedge fund manager who had backed Johnson's turnaround plan.
You know what they say. Timing is everything.
J.C. Penney has few friends on Wall Street, but Thursday, the troubled retailer gained one more.
BTIG analyst William Frohnhoefer issued a "buy" rating, making him one of the few analysts to recommend purchasing J.C. Penney's stock.
Frohnhoefer also set a price target of $22 per share. That's more than 40% higher from where J.C. Penney's (JCP) stock is currently trading. Early Thursday, shares slid 1% to $15.53.
The call is a rare MOREBen Rooney - Mar 14, 2013 11:44 AM ET
JC Penney's latest tangle has many folks speculating about whether there's another hedge fund battle brewing.
The retailer said it received a Notice of Default from law firm Brown Rudnick, which claims to represent an "ad hoc" group who hold more than 50% of JC Penney's bonds due in 2037.
JC Penney says the notice is "utterly without merit" but it's MORECatherine Tymkiw - Feb 5, 2013 12:33 PM ET
Sears (SHLD) is amazingly still one of the hottest stocks of 2012. Shares are up nearly 55% year-to-date. But the retailer's stock plunged more than 20% Friday after the Kmart owner reported another massive loss and a decline in sales.
The company has been MOREPaul R. La Monica - Nov 16, 2012 3:15 PM ET
JC Penney continues to struggle amid a massive overhaul effort.
Shares tumbled Friday, after the department store posted a $203 million loss for the third quarter.
JC Penney's (JCP) loss amounted to 93 cents a share for the quarter, more than thirteen times worse than what analysts were expecting. And sales at stores open at least a year declined more than 26% MOREHibah Yousuf - Nov 9, 2012 11:54 AM ET
Maybe Ron Johnson should have stayed at Apple (AAPL). The J.C. Penney (JCP) CEO continues to struggle to get the retailer on the right track.
Johnson, who helped launch hundreds of retail stores for Apple, succeeded Mike Ullman as CEO of J.C. Penney last year. And investors had high hopes that he'd be able to swiftly turn things around for the retailer, which has been flailing with weak sales and MORECatherine Tymkiw - Sep 20, 2012 12:38 PM ET
Investors are discerning shoppers when it comes to retail stocks.
The clear winners appear to be big-box stores such as Wal-Mart and Target, while specialty outlets such as office supply chain Staples are bringing up the rear.
Shares of Target (TGT) rose to a new 52-week high Wednesday after it reported better-than-expected quarterly earnings and raised its forecast for full-year profits. The stock has gained 26% so far this year, outperforming Wal-Mart's MOREBen Rooney - Aug 15, 2012 2:13 PM ET
On paper, it was a really tough quarter for J.C. Penney (JCP), but CEO Ron Johnson was successful in convincing investors that the company is moving in the right direction.
The retailer, which launched an overhauled pricing strategy in February, lost $147 million during the second quarter, nearly three times more than analysts were expecting. Sales were extremely weak, falling 23% overall from MOREHibah Yousuf - Aug 10, 2012 12:57 PM ET
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