Fitch Ratings has downgraded its Issuer Default Ratings on J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. to 'B' from 'BB-'. The Rating Outlook is Negative. The rating downgrades reflect dismal third quarter performance, where sales declines continued to accelerate, and Fitch's concern that top line will likely get worse during the critical holiday season when promotional events tend to pick up to drive traffic. For 2013, there is a lack of visibility in terms of the company's ability to stabilize its core business, which currently accounts for 90% of its footprint. It remains unclear whether the new shops and merchandise offering can offset any continued declines in the existing business in second half 2013.
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