- JCPenney filed for bankruptcy on Friday, May 15.
- In the midst of the coronavirus outbreak, JCPenney announced that it would close nearly 30% of its stores.
- In 2019, the struggling retailer closed 27 stores.
JCPenney recently celebrated its 118th birthday, but its latest financial news has shoppers wondering how much longer the struggling department store chain will keep its doors open. In wake of the coronavirus crisis, J.C.Penney Company, Inc filed for Chapter 11 bankruptcy, joining retailers like J. Crew and Neiman Marcus.
This doesn't come as a surprise, though. JCPenney was struggling long before the pandemic due to a rise in online shopping and threat of big-box retailers like Walmart and Target. They even closed six stores earlier this year and posted a 5.5% decline in sales for the first three months of 2019. Since the start of 2011, the retailer has closed more than 20% of its stores and cut more than 40% of its staff, yet it still remains bigger than Macy's, Dillard's, and Nordstrom.
CEO Jill Soltau claims the retailer was on the up-and-up earlier this year: "Until this pandemic struck, we had made significant progress rebuilding our company had already begun to pay off. 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," she wrote in a company statement.
While Soltou reiterates that the recent bankruptcy filing doesn't mean that they're going away for good, she made it clear that hundreds of their stores are closing as a result. In fact, 192 JCPenney locations are expected to close in 2020, and an additional 50 next year. That means, 29% of the retailer's 846 stores (242 stores) will close by the end of 2021. The remaining 604 stores "represent the highest sales-generating, most profitable, and most productive stores in the network," JCPenney said in the SEC filing.
They haven't identified the closing stores, but confirmed in the SEC filing that "stores will close in phases throughout the Chapter 11 process – and the first phase of closures, including specific store details and timing, will be disclosed in the coming weeks."
There's a glimmer of hope for JCPenney and other struggling retailers as stores begin to reopen around the country. As of right now, 41 locations have reopened and approximately 115 more stores will reopen in the coming weeks, according to JCPenney spokesperson Brooke Buchanan. But that's not all: There are rumors that Amazon may save the day and buy JCPenney to help expand its apparel business. Of course, only time will tell.
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