JC Penney's department stores were once the core business of the American middle class. But the online trade and new discounter competition have long been difficult for the company. Only the bankruptcy remained in the Corona crisis.
Washington (dpa) - The corona crisis finally brought the traditional US department store chain JC Penney to its knees after years of decline.
The 118-year-old company has filed for bankruptcy and wants to reorganize itself by giving up shops and looking for a buyer. After the bankruptcy filings of the chain stores Neiman Marcus and J. Crew, JC Penney is the largest corona victim in US retail to date. Around 85,000 people work for the company. It was initially unclear how many stores JC Penney would close permanently.
Creditors have given JC Penney a $ 900 million financing commitment to help them survive the corona crisis with their temporary closings. The company still has around $ 500 million in cash. JC Penney said on Saturday night that it was believed that funding commitments and ongoing sales would be sufficient to maintain operations and facilitate restructuring. A deal with donors is expected to reduce the debt burden by several billion dollars. JC Penney has canceled two debt repayment dates since April and is already heading for bankruptcy.
JCPenney still has over 800 stores, many of which are at the heart of American malls. In its long history, the department store chain first emerged as the core business of the US middle class. With the boom in online trading and the dominance of Amazon, JC Penney's stores became more and more the point of contact for bargain hunters with discount coupons. But even with this group of buyers, rivals like TJ Maxx - the American version of TK Maxx - are struggling. JC Penney has been stuck in the red for around a decade.
In 2011, JC Penney wanted to break the downward spiral with a fresh start. Apple manager Ron Johnson, who was hired as a visionary and who had once built up the Apple Store network under the direction of Steve Jobs, opted for consistently lower prices instead of discount coupons and looked at private labels. JC Penney's regular customers received this badly - sales slumped by a quarter to around $ 13 billion within a year.
Johnson had to go after a year and a half. His interim successor, who came from the hardware store chain Home Depot, brought the household appliance category that was abandoned in the 1980s back to the stores. Business continued to shrink: JC Penney had $ 10.7 billion in revenue in the past fiscal year and was in the red of $ 268 million. Meanwhile, JC Penney only told the SEC that the current chief executive, Jill Soltau, would receive a $ 4.5 million bonus. Several other executives should receive $ 1 million in bonuses.
Notification to the stock exchange regulator
JC Penney Notice