The coronavirus pandemic has pushed troubled Plano-based department store chain J.C. Penney into Chapter 11 bankruptcy.
As part of its reorganization, the 118-year-old company said late Friday it will be closing some of its stores and will disclose details and timing in the coming weeks.
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. As a result, the American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company,” said Jill Soltau, chief executive officer of JCPenney, who added that before the pandemic struck the company had made significant progress in the renewal plan to rebuild the company.
The company said that it received $900 million in financing to help it operate during the restructuring, $450 million of which was new money. The company also said they have $500 million cash on hand at the filing date.
Earlier Friday the company made a $17 million interest payment due and payable last week, on May 7, according to CNBC, and that making the payment Friday may have been part of negotiations with lenders to extend the $450 million loan to finance their bankruptcy plans.
"Sales at J.C. Penney have fallen annually since 2016. Its roughly 846 store footprint is less than a quarter of its store base in 2001, and it's nearly $11 billion in sales for the last fiscal year are almost a third of its sales that year," CNBC reported.
Like retailers J.Crew, Neiman Marcus and Stage Stores, who recently filed for bankruptcy protection, J.C. Penney was in trouble prior to the onset of the coronavirus pandemic. CNBC reported the company was considering closing as many as 200 JCPenney stores while in bankruptcy.
Plenty of other retailers are expected to follow.
Earlier this week J.C. Penney and Sephora USA announced they had, "reaffirmed their long-standing partnership to operate Sephora inside JCPenney" and that "both companies worked constructively to resolve outstanding legal matters and have agreed to mutually beneficial revisions to their joint enterprise operating agreement."
Trading on the company's stock was halted for about an hour Friday morning, but the stock jumped nearly 20% on word of Friday's debt payment.
J.C. Penney operates 850 stores and employs nearly 90,000 workers. Some stores are expected to close as part of the restructuring -- those stores will be revealed at a later date.