Is JCPenney Going Out of Business

bankrupt

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  • JCPenney filed for bankruptcy on Friday May 15.
  • In the midst of the coronavirus epidemic, JCPenney announced the closure of nearly 30% of its stores.
  • In 2019, the struggling retailer closed 27 stores.

    JCPenney recently celebrated its 118th anniversary, but its latest financial news makes buyers wonder how long the struggling department store chain will remain open. Following the coronavirus crisis, J.C. Penney Company, Inc. filed for Chapter 11 bankruptcy, joining retailers like J. Crew and Neiman Marcus.

    It is not a surprise, however. JCPenney was struggling long before the pandemic due to an increase in online shopping and the threat of big box retailers like Walmart and Target. They even closed six stores earlier this year and posted a 5.5% drop in sales for the first three months of 2019. Since the start of 2011, the retailer has closed more than 20% of its stores and removed more by 40% of its staff, but it remains even larger than Macy’s, Dillard’s and Nordstrom.

    CEO Jill Soltau says the retailer was on the rise earlier this year: “Until this pandemic broke out, we had made significant progress, the rebuilding of our business had already started to bear fruit. of this financial restructuring plan through a court-supervised process is the best way to ensure that JCPenney will build on its more than 100-year history to serve our customers for decades to come, “said she writes in a company press release.

    While Soltou reiterates that the recent bankruptcy does not mean they are leaving forever, she said hundreds of their stores are closing as a result. In fact, 192 JCPenney sites are expected to close in 2020, and another 50 next year. That means, 29% of the retailer’s 846 stores (242 stores) will close by the end of 2021. The remaining 604 stores “represent the most profitable, profitable and productive stores in the network,” JCPenney said in the SEC filing.

    They did not identify the stores closing, but confirmed in the SEC file that “the stores will close in phases throughout the Chapter 11 process – and the first phase of closings, including specific details and timing stores, will be released in the coming weeks. ”

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    There is a silver lining for JCPenney and other struggling retailers as stores begin to reopen across the country. Currently, 41 stores have reopened and about 115 other stores will reopen in the coming weeks, according to JCPenney spokesperson Brooke Buchanan. But that’s not all: there are rumors that Amazon could save the day and buy JCPenney to help grow its clothing business. Of course, only time will tell.

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    Associate lifestyle editor
    As an Associate Lifestyle Writer for GoodHousekeeping.com, Amanda oversees the gift guides and covers home, vacation, food and other lifestyle news.

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