J. C. Penney

History

2020: Declaration of bankruptcy

In the middle of May, 2020 one of the networks of J.C. Penney department stores, largest in the USA, declared bankruptcy and the planned closing of 29% of shops. The reason of these compulsory measures the company calls negative effects of a koronavirusny (COVID-19) pandemic.

According to the document filed by the company to Securities and Exchange Commission, J.C. Penney is going to close nearly a third of the shops, i.e. 242 of 846 outlets. Current financial year which comes to an end in February, 2021 the closing of 192 shops is expected, 50 more will be closed next financial year. After closing the company will have 604 more outlets.

One of the networks of J.C. Penney department stores, largest in the USA, declared bankruptcy

These points represent our best, most profitable shops in network, - explained J.C. Penney of the commission.

The company stated that it signed the agreement with most of creditors on the plan of a restrukturalization which will allow it to continue work. Closing a set of shops, the retailer aims to stabilize the financial position and to avoid direct liquidation. The list of shops which are going to be closed within restructuring was not published yet.

To a pandemic of J.C. Penney it was burdened with debts: the solvency of the company steadily decreased for many years against the background of e-commerce growth. In the last quarter, sales of J.C. Penney dropped almost by 8% in comparison with the same period of last year, and income was only $27 million whereas for the anlogichny period a year ago the company earned $75 million. As a result the company missed two debt payments in April and May. According to the CEO Jill Soltau, bankruptcy became the best exit from current situation and is capable to become an impulse for revival of retail chain stores.^[1]

Notes