J.C. Penney exemplifies economy
J.C. Penney, whose stores help anchor hundreds of malls across the country, delivered fresh evidence Friday that the economy is faltering in the face of higher gasoline prices and lower consumer confidence.
The Plano, Texas-based department store chain warned that first-quarter profits will be one-third lower than Wall Street expected, sending its shares tumbling nearly 14 percent at one point. The stock of other retailers dropped as well.
Chief executive Myron Ullman said higher energy costs, a drop in hiring and weak housing and credit markets were weighing consumers down.
The company said it now expects first-quarter net income of about 50 cents per share, down from its earlier forecast for a profit of 75 cents to 80 cents per share.
“The lenders committed to financing the $19.5 billion private buyout of Clear Channel Communications Inc. didn’t show up to a meeting of the company and buyers even after a judge issued an order barring the banks from hindering or undermining the deal, the company said in a filing Friday.
Representatives from Clear Channel and the private equity buyers, led by Bain Capital and Thomas H. Lee LLC, met Thursday – the day after a temporary restraining order was issued to bar the banks from purposely sinking the deal. But the lenders didn’t show, and Clear Channel said in a filing with the Securities and Exchange Commission that “the company continues to be ready, willing and able to consummate the merger. … The company is unable, however, to estimate a closing date at this time and cautions the markets that a closing may not occur.”
“A bankruptcy judge has approved Lionel LLC‘s Chapter 11 reorganization plan, clearing the way for the iconic model-train maker to exit bankruptcy.
Judge Burton R. Lifland of the U.S. Bankruptcy Court in New York on Thursday confirmed Lionel’s plan, which calls for private-equity firm Guggenheim Corporate Funding and the estate of the late Martin Davis, former chairman of Paramount Communications Inc., to pump $59 million of new cash into the reorganized company, Lionel chief executive Gerald Calabrese said.
New York-based Guggenheim will contribute $37.1 million to the new Lionel, and the Davis estate – which is controlled by Davis’ widow – will contribute $21.9 million.
Rock star Neil Young, a former minority owner, is not – at present – part of the new ownership group. The Davis estate owned 75 percent of the old Lionel and Young owned 20 percent. Those stakes have been wiped out under Lionel’s reorganization plan.