JCPenney files for bankruptcy

JCPenney files for bankruptcy

It seems like a weird move, for a company filing for bankruptcy, but their reasoning actually makes a lot of sense.

JCPenney, a major retailer that had been closing stores before the coronavirus struck, filed for bankruptcy on Friday and will soon begin to permanently shutter locations.

This company hopes to reemerge from chapter 11 bankruptcy as a stronger retailer.

The chain, based in Plano, Texas, skipped debt payments before the filing, putting it on a path toward default.

According to reports from CNN, the company was already facing challenges, and now with the rapid spread of COVID-19 causing businesses to remain closed for the foreseeable future, it doesn't look like the company will be able to withstand the lack of business coming through their doors.

James Cash Penney, Jr. founded the eponymous retailer with partners in 1902 in Kemmerer, Wyoming.

"The American retail industry has experienced a profoundly different new reality, requiring JCPenney to make hard decisions in running our business", she continued.

J.Crew and Neiman Marcus also announced bankruptcies this month.

Its decline began a decade ago with the advent of online shopping and the rise of Amazon as well as trendy, cheap chains like H&M and Zara.

Several reports elaborate on how JC Penney was a century-old cornerstone in nearly all U.S. malls, as it had grown over more than 100 years to be a household name across America with its budget-friendly clothing and reliable home furnishings.

In February, JCPenney had about 90,000 employees and almost 850 stores in the United States, according to documents provided to the US Securities and Exchange Commission (SEC).

Related Articles