Business

JC Penney to file for bankruptcy as soon as next week

It is reported the US retailer plans to permanently close a quarter of its 850 stores

The Texas-based retail giant JC Penney employs nearly 85,000 people

Fri May 8 2020 - 15:41

JC Penney Co is preparing to file for bankruptcy protection as soon as next week, with plans to permanently close about a quarter of its roughly 850 stores, according to people familiar with the matter. This would make it the latest major US retailer to succumb to fallout from the coronavirus outbreak.

A bankruptcy filing would cap a long decline for the iconic 118-year-old department store chain which has struggled with a nearly $4 billion (€3.7bn) debt load and competition from e-commerce firms and discount brick-and-mortar retailers even before the pandemic’s onset.

The Texas-based company, which employs nearly 85,000 people, is in discussions with creditors for a so-called debtor-in-possession loan to bolster its finances while it navigates bankruptcy proceedings, the sources said. The loan could total between $400 million and $500 million, some of the sources said.

The timing of a bankruptcy filing could slip depending on how much time it gets from creditors, the sources said.

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JC Penney skipped a $17 million debt payment Thursday, and only has five days to make good on it before defaulting. A 30-day grace period on a $12 million payment the company skipped April 15th ends next Friday.

JC Penney has not made a final decision on how to address its strained finances, and is also considering alternatives that include negotiating a deal with creditors outside of bankruptcy court or obtaining additional financing, the sources said.

The sources spoke on condition of anonymity to discuss confidential deliberations. JC Penney declined to comment. – Reuters

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