- Sources have told Reuters that J.C. Penney is preparing to file for bankruptcy protection as early as next week
- While the company is aiming to reorganize and reemerge, it reportedly plans to permanently shutter around 200 of its 859 stores
- J.C. Penney was first established in 1902, and currently employs nearly 85,000 people across 49 different states
- Earlier this week, luxury department store Neiman Marcus and fashion brand J.Crew both filed for bankruptcy protection amid the coronavirus pandemic
J.C. Penney Co is preparing to file for bankruptcy protection as soon as next week with plans to permanently close about a quarter of its roughly 850 stores, becoming the latest major U.S. retailer to succumb to fallout from the coronavirus outbreak, according to people familiar with the matter.
A bankruptcy filing would cap a long decline for the iconic 118-year-old department store chain, which struggled with a nearly $4-billion debt load and competition from e-commerce firms even before the pandemic’s onset.
The Plano, Texas-based company, which employs nearly 85,000 people, is in discussions with creditors for a so-called debtor-in-possession loan to bolster its finances while it navigates bankruptcy proceedings, the sources said. The loan could total between $400 million and $500 million, some of the sources said.
J.C. Penney declined to comment when approached by Reuters.
Retailers are bearing a significant brunt of the economic fallout from the pandemic as sales all but evaporate. Just this week, luxury department store chain Neiman Marcus Group and clothing retailer J. Crew Group Inc filed for bankruptcy protection.
In April, the U.S. economy lost 20.5 million jobs, the steepest plunge since the Great Depression, the Labor Department reported on Friday.