Department store J.C. Penney announced Monday it plans to close 242 stores across the country as part of its bankruptcy restructuring.
The 118-year-old company filed for bankruptcy Friday. The stores to be closed comprise about 30 percent of J.C. Penney locations and will leave it with just over 600 stores nationwide, according to the New York Times.
While the coronavirus pandemic and resulting retailer closures likely factored into J.C. Penney’s bankruptcy, the company was in a dire financial state long before. As of late April it was in discussion with its lenders for a debtor-in-possession loan of at least $800 million.
Bankruptcy filings show that J.C. Penney plans to close 192 stores this year and sell 50 stores that it owns next year, according to the Times. It plans to hold on to its best performing stores, which accounted for 82 percent of last year’s revenue. The company also aims to boost online sales from 14 percent of its revenue last year to a quarter of revenue by 2024.
April was a devastating month for U.S. retailers. Total sales, including online, fell 16.4 percent from the month prior as the vast majority of physical retail stores were closed all month. That was the largest drop on record, followed by the 8.3 percent drop in March.
Less money is moving up the financial food chain. In mid-April, some landlords had collected just 15 percent of their usual monthly rents and there’s concern that missed payments could lead to a wave of defaults.
[NYT] — Dennis Lynch
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