PLANO, Texas (CBSDFW.COM/AP) - Plano-based JCPenney filed for Chapter 11 bankruptcy protection on Friday, becoming the latest retail casualty of the coronavirus pandemic.
As part of its reorganization, the 118-year-old company said late Friday it will be closing some of its stores and will disclose details and timing in the coming weeks.
It operates 850 stores and it has nearly 90,000 workers. It said that it received $900 million in financing to help it operate during the restructuring.
JCPenney joins luxury department store chain Neiman Marcus, J.Crew and Stage Stores in filing for bankruptcy reorganization. Plenty of other retailers are expected to follow.
During this process, JCPenney said in a news release Friday evening, the company "will continue to be one of the nation's largest apparel and home retailers with an expansive footprint of hundreds of stores across the U.S. and Puerto Rico" and online.
"The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. As a result, the American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company. Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy –and our efforts had already begun to pay off. While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt," said Jill Soltau, chief executive officer of JCPenney.
Soltau continued, "Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that JCPenney will build on its over 100-year history to serve our customers for decades to come."
Many experts are skeptical about Penney's survival even as it sheds its debt and shrinks the number of its stores. Its fashion and home offerings haven't stood out for years. And moreover, its middle-to-low income customers have been the hardest hit by massive layoffs during the pandemic. Many of them will likely shop more at discounters — if they shop at all, analysts say.
"This is a long, sad story," said Ken Perkins, president of Retail Metrics, a retail research firm. "Penney offers no reason to shop there compared to its competitors, whether it's Macy's or T.J. Maxx or Walmart. How are they going to survive?"
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
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