The American chain of stores J.C. Penney filed for bankruptcy this Friday, becoming the largest retailer and the latest victim of the financial havoc caused by the coronavirus.
The warehouse chain had long struggled to stay afloat in the midst of the growing crisis of retail stores with physical presence, facing the competition of online shopping.
Sales at J.C. Penney’s have fallen annually since 2016. In 2020, its approximately 860 stores are less than a quarter of what it had in 2001.
As part of the post-bankruptcy reorganization, the company that has been on the market for 118 years said it will close some other stores. He added that in the next they will publish more details about it.
J.C. Penney is the fourth chain in a group of major retailers that have been forced to take that drastic step since the virus hit the United States. In that same case are the chain of luxury stores Neiman Marcus, J. Crew and Stage Stores. Financial analysts have warned that many other retail chains may follow.
“The coronavirus pandemic has created unprecedented challenges for our families, our loved ones, our communities and our country,” Penney CEO Jill Soltau said in a statement. “As a result, the American retail industry has experienced a profoundly different new reality, demanding that J.C. Penney makes tough decisions when managing our business to protect the safety of our associates and customers and the future of our business. “
Many experts are pessimistic about Penney’s survival, even when she gets rid of her debt and reduces the number of stores. Its fashion and home supplies have not been well received for years. Further, its middle-to-low-income customers have been hit hardest by the mass layoffs during the pandemic. Many of them are likely to buy more at discount stores, if at all, analysts say.
The chain said it has $ 500 million in cash and has received commitments of $ 900 million in financing to help it operate during the restructuring. He added that he will look for different options, including the sale of the company.
Like many similar department stores, Penney faces difficulties in remaining relevant in an age when Americans shop more online or at discount stores.
Sears, for example, has now been downgraded to a couple of hundred stores for the same reason. Barneys New York closed its doors earlier this year and Bon-Ton Stores closed in 2018.
News in development …
With information from AP
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