Daily Management Review

JCPenney announces bankruptcy


As expected, JC Penney, one of the largest US department store chains, filed for bankruptcy. This is stated in the message of the company, founded in 1902.

Notification of the beginning of the restructuring procedure in the conditions of protection against creditors under Art. 11 US Bankruptcy Laws have been filed with the Texas South Bankruptcy Court. JC Penney notes that it has already reached an agreement on debt restructuring with its creditors, who own 70% of the preemptive rights to debt. The company also agreed with them to raise new funds in the amount of $ 450 million for operational restructuring, which, among other things, will include the reduction of some employees and stores.

Currently, JC Penney has approximately 850 stores in the United States and Puerto Rico. Like many other traditional retailers in the United States, JC Penney has been in crisis for several years due to the expansion of online retail. The last profitable year for the company was 2010. The difficult situation was aggravated by the coronavirus pandemic when, due to quarantine measures, people began to buy even less in ordinary stores and even more through the Internet. Since the beginning of the year, JC Penney shares have fallen by 70%. In April alone, US retail sales fell 16.4%.

According to unofficial information from the American media, the crisis in traditional US retail can lead to a new wave of bankruptcies - in addition to JC Penney, retail chains such as Neiman Marcus, Lord + Taylor, Stage Stores can start restructuring in the face of protection from creditors.

source: bloomberg.com