But customers weren't responding to the changes, and Johnson has tweaked his strategy a few times, including bringing back the word "sale" in its marketing last spring. The latest change came early February when Penney began adding back more sales events and putting price tags on half of its merchandise to show customers how much they're saving by shopping at Penney.
Penney said that it's seeing positive results from its makeover of some of its stores with sectioned-off shops that feature different brands. The company plans to have 700 of its 1,100 stores nationwide remodeled in the coming years, but critics question whether the company is running out of time — and money.
In November, Penney said that it would end the latest fiscal year with $1 billion in cash. But the company winded up ending the year with $930 million in cash, which was better than analysts had feared but below the company's target.
The company also told investors on Wednesday that it delayed $85 million in payments to its suppliers from the fourth quarter to the early part of the first quarter. That suggests they're running out of cash.
And two rating agencies — Standard & Poor's Ratings Services and Fitch Ratings — raised further concerns on Thursday about Penney's ability to meet its loan commitments. Both lowered their credit ratings on Penney, which were already in junk status, by one notch.
"Our analysis suggests (Penney) will deplete cash" in the third quarter, wrote Kimberly C. Greenberger, an analyst at Morgan Stanley in a report published Thursday.
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