TOP US DEPARTMENT STORE CHAIN J.C. PENNEY FILES FOR BANKRUPTCY
COVID-19 has claimed its top casualty in the US—the big department store chain J. C. Penney--- which was an enviable winner since it started as a dry goods store in Wyoming in 1902 and expanded to more than 1,000 stores before hard times hit the American icon 20 years ago, reducing its outlets to 800 and cutting staff down to 85,000,saddling it with low sales, higher inventory costs and the debilitating pandemic that pushed it over the cliff. It followed the lead of the luxury store Neiman Marcus, J. Crew and the designer clothing brand John Varvatos.
In a story written for the New York Times on May 15, 2020, Sapna Maheshwari and Michael Corkery, J. C. Penney said it filed for Chapter 11 bankruptcy protection from its creditors in a federal bankruptcy court for the Southern District of Texas, and confirmed that it has $500 million in cash on hand and had received commitments for $900 million in financing to use during the bankruptcy process.
The company said it had struck a deal with lenders that would reduce several billion dollars of its debt and is mulling the sale of the chain while some stores may be shut down in the coming weeks.
Jill Soltau, J.C. Penney’s chief executive, said that the retailer expected to emerge from “Chapter 11 and this pandemic as a stronger retailer.” J.C. Penney failed to make an interest payment on its debt in April to “maximize financial flexibility,” and then skipped another payment last week.