J.C. Penney files for bankruptcy protection

JCPenney logo with stock chart

In recent years, market trends have led to numerous high-profile bankruptcies in the retail business, including the likes of Toys "R" Us and Sears.

Department store giant J.C. Penney Co. filed for bankruptcy protection on Friday, punctuating a slow, arduous decline for the once-ubiquitous mainstay of America's shopping malls. The company filed for bankruptcy protection on Friday, after having witnessed a decline in business for nearly two decades past, with the COVID-19 crisis simply exacerbating its financial strain. In January, J.C. Penney said would close six stores by April 24 leading many to speculate if the company could see some type of recovery. Its bankruptcy filing in Houston included $900 million of financing to fund the company through its restructuring, including $450 million of fresh capital. The Guardian report states that against this backdrop, the company already faced a "looming $105 million debt payment in June and $300 million of annual interest expenses".

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

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"The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. 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 118-year-old department store has 846 locations that employed around 90,000 people. The company at one point employed almost 200,000 people.

J.C. Penney joins fellow department store chains Neiman Marcus and Stage Stores as victims of the pandemic, which has forced their doors shut and exacerbated problems that existed before the virus started spreading.

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