JCPenney announced it had filed for Chapter 11 bankruptcy last week, despite the company’s efforts to transform itself back into a retail leader. As a result, the company will be closing more than 200 stores around the country.
The company was already struggling to keep stores open and pay off its nearly $4 billion in long-term debt before the coronavirus pandemic, Reuters reported, but it had made some gains, improving sales at some locations and reducing inventory by focusing on higher-margin core products.
Then the pandemic hit. After temporarily shuttering all of its locations, the retailer furloughed most of its 95,000 employees in late March.
In a May 15 statement about the filing, JCPenney’s chief executive officer Jill Soltau cited the pandemic as the main culprit behind the restructuring move.
“Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy — and our efforts had already begun to pay off,” Soltau said in a statement. “While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt.”
Now, JCPenney will close a number of its locations in phases, according to the retailer’s restructuring website. While the company did not specify which stores will be shuttered during this process, Business Insider reported that JCPenney’s presentation to the Securities and Exchange Commission about the restructuring included plans to close about 240 stores, or around 30% of its 846 existing stores, though the presentation said the “exact number continues to evolve,” according to BI.
What does this Chapter 11 bankruptcy restructuring plan mean for JCPenney customers? Currently, JCPenney locations around the U.S. are slowly re-opening as state governments ease stay-at-home restrictions. Customers can choose to shop in the open stores or continue to use their website to place orders for curbside pickup or delivery.
“Our team has continued to innovate even during these challenging times, including recent improvements to our mobile website, providing for a faster, easier, and simpler shopping experience,” JCPenney said on its restructuring website.
Customers can also continue to return items with an extended “flexible return policy” for an additional 30 days from the time stores reopen or via mail by following the online store’s instructions.