The financial pressure of the coronavirus pandemic has forced US department store chain JCPenney to file for bankruptcy protection.
Stores will be closed down following the Chapter 11 bankruptcy filing, which allows companies to reorganise in order to meet debts.
The 118-year-old company said that some of its more than 800 stores will be closed in phases throughout the Chapter 11 process.
It is the largest of four household-name retail companies to file for bankruptcy reorganisation since the pandemic landed in the US.
Luxury retailer Neiman Marcus, alongside J.Crew and Stage Stores, have also filed for bankruptcy during the outbreak.
“The coronavirus pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” said Penney’s chief executive Jill Soltau.
“As a result, the American retail industry has experienced a profoundly different new reality,” she explained.
However market analysts aren’t convinced that the company will survive even if it reduces it debt burden by closing stores.
:: Listen to Divided States on Apple podcasts, Google Podcasts, Spotify, and Spreaker
They note that its middle-to-low income customer base has been the hardest hit by the pandemic layoffs in the US.
“This is a long, sad story,” said Ken Perkins, president of research firm Retail Metrics.
“Penney offers no reason to shop there compared to its competitors, whether it’s Macy’s or TJ Maxx or Walmart. How are they going to survive?” he asked.
According to US Department of Labor figures, more than 36 million Americans have filed for unemployment since the beginning of March.
Unemployment in the country now stands at more than 14.7% according to official figures, the worst it has been since the Great Depression in the 1930s.
Credit: Source link