NEW YORK: The coronavirus pandemic has pushed the storied but troubled department store chain J.C. Penney into Chapter 11 bankruptcy. It is the fourth major US retailer to meet that fate, foreign media reported on Saturday.
As part of its reorganisation, the 118-year-old company said late Friday it will be shuttering some stores. It said the stores will close in phases throughout the Chapter 11 process and details of the first phase will be disclosed in the coming weeks.
Penney is the biggest retailer to file for bankruptcy reorganisation since the pandemic and joins luxury department store chain Neiman Marcus, J.Crew and Stage Stores. Plenty of other retailers are expected to follow as business shutdowns across the country have evaporated sales. In fact, US retail sales tumbled by a record 16.4% from March to April.
“The coronavirus pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” said Penney’s CEO Jill Soltau in a statement. “As a result, the American retail industry has experienced a profoundly different new reality, requiring J.C. Penney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company. “
Many experts are skeptical about Penney’s survival even as it sheds its debt and shrinks the number of its stores. Its fashion and home offerings haven’t stood out for years. And moreover, its middle-to-low income customers have been the hardest hit by massive layoffs during the pandemic. Many of them will likely shop more at discounters — if they shop at all, analysts say.
“This is a long, sad story,” said Ken Perkins, president of Retail Metrics, a retail research firm. “Penney offers no reason to shop there compared to its competitors, whether it’s Macy’s or T.J. Maxx or Walmart. How are they going to survive?”
Like many department stores, Penney is struggling to remain relevant in an era when Americans are buying more online or from discounters.
