After years of decline, the corona crisis has hit the long-established US department store chain J.C. Penney brought to his knees. The 118 year old company filed for bankruptcy. Now the company wants to close shops and look for a buyer. Around 85,000 people work for the company – making it the largest corona victim in US retail to date.
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The creditors have J.C. Penney made a $ 900 million pledge to help survive the corona crisis. The company also has approximately $ 500 million in cash. The company believes that these funds and ongoing sales are sufficient to maintain operations during the bankruptcy process and to facilitate restructuring. J.C. Penney has canceled two dates for debt repayment since April, and is already on course for bankruptcy proceedings.
J.C. Penney still has over 800 stores, many of which are at the heart of American malls. In its long history, the department store chain first emerged as the core business of the US middle class. With the boom in online commerce and the dominance of Amazon, J.C. Penney then more to the point of contact for bargain hunters with discount coupons. But even with this group of buyers, rivals like TJ Maxx – the American version of TK Maxx – are struggling. J.C. Penney stuck in the red.
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Boss receives $ 4.5 million bonus
In 2011 J.C. Penney break the downward spiral with a fresh start. Apple manager Ron Johnson, who was hired as a visionary and who had once built up the Apple Store network under the direction of Steve Jobs, opted for consistently lower prices instead of discount coupons and looked at private labels. That came from the regular customers of J.C. Penney badly – sales slumped by a quarter to around $ 13 billion within a year.
Johnson had to go after a year and a half. His successor in the meantime, who came from the hardware store chain Home Depot, brought the category of home appliances that was abandoned in the 1980s back to the shops. Business continued to shrink: J.C. Penney still had sales of $ 10.7 billion and posted red of $ 268 million.
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Despite the meager business, the top managers of the group still earn splendidly: J.C. Penney said current company boss Jill Soltau will receive a $ 4.5 million bonus. Several other executives should receive $ 1 million in bonuses.
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