JCPenney filed for bankruptcy on Friday, the latest retail giant to see its downfall hastened by the coronavirus crisis. The pandemic was the final blow to a 118-year-old company struggling to overcome a decade of bad decisions, executive instability and damaging market trends.
The company said it has an agreement with most of its lenders on the turnaround plan that will allow it to stay in business as a more financially healthy company, but will include closing a yet unannounced number of its 846 stores. It as part of the turnaround process it had arranged to borrow an additional $450 million from those lenders to pay for operations during the reorganization.
The company blamed the Covid-19 pandemic for the need to file bankruptcy.
“Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy — and our efforts had already begun to pay off,” said CEO Jill Soltau. “Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that JCPenney will build on its over 100-year history to serve our customers for decades to come.”
JCPenney is the fourth national retailer to file for bankruptcy just this month. On May 4, clothing retailer J.Crew filed for bankruptcy, followed by a filing at Neiman Marcus on May 7. On May 10 Stage Stores (SSI) filed for bankruptcy.