After JCrew, Neiman Marcus and Stage Stores, it is the turn of the clothing chain JC Penney to be struck down by the coronavirus: the company announced Friday placing itself under the American regime of bankruptcies. The Plano group (Texas, south) indicated that it had recourse to Chapter 11, a device that allows a company that can no longer repay its debt to restructure away from creditors.
JC Penney said he had $ 500 million in cash and had received funding commitments of up to $ 900 million from debtor-operators. The company had missed a debt interest payment deadline in April, which had fueled rumors of an impending bankruptcy.
Read also: Economic crisis: first bankruptcies despite the government aid system
"The coronavirus (Covid-19) has created unprecedented challenges for our families, loved ones, communities and country," said JC Penney patron Jill Soltau in a statement. "As a result, the American retail industry is experiencing a profoundly different new reality that has forced JC Penney to make difficult decisions in the conduct of our business," she said.
Already in great difficulty before the pandemic, the chain will not have withstood the economic shock caused by the coronavirus.
"If we had worked in parallel on options to strengthen our balance sheet and our financial resources, the closure of our stores due to the pandemic required a more detailed examination of the means of eliminating the unpaid debt" , explains Jill Soltau.
Read also: JC Penney to close 130 to 140 stores
Founded in 1902 in Wyoming by James Cash Penney, the chain has become over time an institution of American mass distribution. It survived the Great Depression and established itself during the second half of the 20th century, in giant shopping centers (“malls”), then symbols of the American consumer society. Like that of other department stores, its decline, which began a decade ago with the advent of online commerce, was precipitated by the success of Amazon and "fast fashion" (H&M and Zara).
In February, JC Penney employed around 90,000 people and owned nearly 850 stores in the United States, according to documents sent to the American stock market policeman, the SEC. The company plans to reduce its number of signs "in stages" as part of its vast restructuring plan. It reported revenue of $ 10.7 billion in 2019, a drop of more than $ 7 billion in ten years. JC Penney has not been profitable in a fiscal year since 2011.