J.C. Penney Co. Inc. is the latest retail giant whose downfall was quickened by the COVID-19 crisis. The crisis was the final blow needed for it to file for bankruptcy protection on Friday. The 118-year-old organization was struggling to surmount years of executive instability, bad decisions, and crippling market trends.
The coronavirus has succeeded in putting retail stores in peril as extended closures evaporate their sales. Although Penney has begun reopening in states such as Florida and Texas, where lock downs have been relaxed, customers are yet to feel comfortable in public spaces. Hence, the reason for decreased sales.
On Friday, JCP said it had filed the Chapter 11 petition for reorganizing the company and entered a restructuring agreement with its lenders who hold approximately 70% of a part of the debt owed by the company. In the extended session, JCP fell 29%, which led to the difficult bankruptcy decision to protect its associates, customers, and future.
For restructuring purposes, the company stated its decision to close down some of its stores. It’s supposed that the company received $900 million to help it function while the reorganization was taking place. With 850 stores and about 90,000 workers, Penney is striving to stay relevant in an e-store era where American online stores are being patronized consistently.
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