COVID-19: JCPenney Files For Bankruptcy In Largest Retail Casualty Of Pandemic

COVID-19: JCPenney Files For Bankruptcy In Largest Retail Casualty Of Pandemic

COVID-19: JCPenney Files For Bankruptcy In Largest Retail Casualty Of Pandemic

Add JCPenney to the list of retailers filing for bankruptcy.

NEW YORK, May 16 ― USA department store JCPenney, which has not turned a profit since 2011, yesterday became the latest American retailer to be pushed into bankruptcy by the coronavirus pandemic.

This company hopes to reemerge from chapter 11 bankruptcy as a stronger retailer.

The U.S. department store chain, known for selling family apparel, cosmetics and jewelry at roughly 850 locations, said it reached an agreement with creditors for about $900 million of fresh financing to aid operations, while it navigates bankruptcy proceedings.

According to reports from CNN, the company was already facing challenges, and now with the rapid spread of COVID-19 causing businesses to remain closed for the foreseeable future, it doesn't look like the company will be able to withstand the lack of business coming through their doors.

Founded in 1902, JCPenny has about 800 stores in the United Staes. "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", Soltau said.

The COVID-19 pandemic spells doom for several retail chains with brick-and-mortar stores, such as J. Crew, the Neiman Marcus Group, and the designer men's clothing brand John Varvatos.

Lenders may be balking on providing J.C. Penney funding to keep its business open during a run through bankruptcy and ultimate resurrection, given years of losses and a dim outlook for the department store industry.

The company plans to reduce its number of stores in stages as part of its comprehensive restructuring plan.

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