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J.C. Penney Gets NYSE Warning on Possible De-listing

David Moin

J.C. Penney Co. Inc. has been notified that it’s no longer in compliance with New York Stock Exchange listing criteria requiring companies to maintain an average closing share price of at least $1 over a consecutive 30 trading-day period.

J.C. Penney now has six months to get the stock back above the NYSE’s share price requirement or else get delisted. It could get an extension if the retailer comes up with a way to remedy the situation that would require shareholder approval. The company received the same NYSE warning last year, but the stock did get back over the $1 mark, and was lifted after its chairman Ronald Tysoe purchased 1 million shares.

The company said it intends to pursue measures to cure the share price non-compliance, including possibly a reverse stock split, which would be subject to shareholder approval, and notify the NYSE within 10 business days of its intent to cure the deficiency. On Friday, the stock closed at 75 cents, down 4.8 percent.

Penney’s said it is in compliance with all other NYSE continued listing standard rules, and that Friday’s notification from the NYSE does not affect its business operations or its Securities and Exchange Commission reporting requirements, and it does not “conflict with or cause an event of default under any of the company’s material debt or other agreements.”

Penney’s turnaround efforts are being led by its chief executive officer Jill Soltau. Among the changes in the works, the women’s selling floors are being recast into five distinct, easier-to-shop lifestyle departments; greater emphasis on denim and casual merchandise; enhanced visual display to spotlight trends and outfits, and “inclusiveness” so plus sizes are displayed next to misses sizes. Also, the home floor is being reinvented with national and private brands.

But the company is up against a ticking clock and needs to reverse declining sales and trends or face extinction. It has about $1.75 billion in liquidity so it can handle near-term payments, though more than $2 billion of its total $4 billion in long-term debt comes due in 2023.

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