Last updated on May 16, 2020
JCPenney filed for bankruptcy on Friday. It is the latest retail giant to see its downfall expedited by the coronavirus crisis. The COVID-19 pandemic was the final blow to a 118-year-old almost struggling company.
“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.
The company said it has an agreement with most of its lenders on the turnaround plan that will allow it to stay in business as a more financially healthy company, but will include closing an as yet unannounced number of its 846 stores. As part of the turnaround process JCPenney arranged to borrow an additional $450 million from those lenders to pay for operations during the reorganization.
Ms. 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. We believe the RSA and the widespread support we have received from our asset-based lenders and first lien lenders will allow us to pursue a financial restructuring on an expedited timeframe. We are also encouraged by the level of support we have received from our vendor partners, landlords, and other stakeholders, whose confidence in our business and our people is expected to contribute to a successful reorganization.”
JCPenney is not the first major retailer to file for bankruptcy this month. On May 4, clothing retailer J.Crew filed for bankruptcy, followed by a filing at Neiman Marcus on May 7.
The Rockwall JCPenney is located at 1015 E Interstate 30.
