As JC Penney’s (JCP) struggles deepen, the retailer has now reportedly considering hiring consulting firm AlixPartners LLP to help it manage its approximately $3.72 billion in debt.

JC Penney stores went dark as the coronavirus spread across the nation, leaving the company little time to recover from its financial challenges. The company furloughed the majority of its workers and is now looking to keep itself afloat as COVID-19 continues to bear down on the U.S.

According to sources for Bloomberg, JC Penney has been holding discussions with its lenders over the last few weeks as it looks to negotiate a deal to manage its debt and free up cash. This is not the first time that JC Penney has tried to work out a deal as the company hired a restructuring consultant last year.

Prior to closing all of its stores, JC Penney was undergoing a turnaround as it looked to gain back customers. The company added and expanded its men’s and woman’s brands, partnered with women’s secondhand apparel company thredUp, and tried new store formats to entice foot traffic.

But it may not have been enough as the company was downgraded by Moody’s (via Retail Dive) on Monday to junk status with Christina Boni, vice president of the firm, saying, “Although J.C Penney liquidity is adequate, the widespread store closures as a result of the coronavirus pandemic and the continued suppression of consumer demand is expected to pressure ... EBITDA, impede its turnaround strategy and weaken its leverage to unsustainably high levels.”

Led by CEO Jill Soltau, JC Penney saw its sales fall 8.1% in 2019 to $10.72 billion, compared to a year earlier. Cash on hand for the company was $386 million as of Feb. 1.

Shares of JC Penney stock were down 3.2238% as of 2:30 p.m. EDT on Tuesday.

JC Penney Store Closures Q4
J.C. Penney announced that it would be closing another 27 stores by the second quarter of 2019. Signage is displayed at the entrance of a JC Penney department store inside the Manhattan Mall on May 15, 2017 in the Herald Square neighborhood in New York City. Getty Images/Drew Angerer
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