J. C. Penney Company Inc.’s recent disclosure that its chairman bought 1 million shares of the firm has sent its stock up more than 6% in Tuesday morning trading.
According to a filing with the U.S. Securities and Exchange Commission, Ronald Tysoe purchased the shares at 59 cents each, raising his total owned JCPenney shares to 1,352,128. Its stock was still worth 63 cents, as the retailer remains at risk of delisting from the New York Stock Exchange. (In order to remain listed, JCPenney must post an average closing share price over a 30-day period to above $1.)
The move comes just days after the Plano, Texas-based company released second-quarter financials, with revenues dipping more than expected but losses reduced from $101 million the previous year to $48 million, or 15 cents per share. Wall Street had predicted a loss of 31 cents a share.
On the heels of its sales results, JCPenney also announced a partnership with ThredUp, with 30 of its stores soon offering a selection of the online consignment giant’s secondhand apparel and accessories to be curated weekly.
However, experts remain wary about the company’s potential to keep up with the changing retail environment. Jane Hali & Associates CEO Jane Hali, for example, described JCPenney as “structurally challenged” amid the shift to e-commerce and broader brick-and-mortar decline.
“JCPenney doesn’t have a Generation Y and Z approach,” she explained. “Having ThreadUp is the first initiative we have seen that targets a younger audience. It is still a boomer store, and this generation is not purchasing as much as traveling [and spending on other categories].”
SEC filings put JCPenney’s debt at roughly $4 billion. It was recently added to credit rating agency Fitch Ratings’ “loans of concern” list, with a high risk of defaulting on a $1.57 billion loan balance.
The company has also hired advisors to explore debt restructuring options to buy itself more time for a turnaround. After taking the helm in October, CEO Jill Soltau has made a concerted push toward JCPenney’s retail makeover, shuttering a few dozen underperforming stores and hiring new talent at the start of the year.
From Bankruptcy Rumors to Cheap Stock and High Debt: How JCPenney’s CEO Says She’ll Fix the Department Store
JCPenney’s Struggles Worsen — Joins Fitch’s Top ‘Loans of Concern’ List
Watch the highlights at the 2018 FNAAs.