The coronavirus’ latest victim is not a singular person or individual, but rather a large corporate entity. JCPenney, the iconic department store chain, has become the latest major company to file for bankruptcy amid the Covid-19 Pandemic. While it’s not the first, and may not be the last major corporation to collapse due to the crisis, it is one of the largest and notable ones thus far.
JCPenney, is almost a 120 year-old company, and was four-billion dollars in debt, according to CNN, so some may argue that its downfall was inevitable. While this is up for debate, there is no disagreement that the company was, financially, in a bad spot and the economic slowdown and nationwide lockdowns due to the pandemic certainly sped up their demise.
Last week, JCPenney announced it was filing for Chapter 11 bankruptcy as a consequence of Covid-19. While this means a large number of their stores will be closing, and they will undergo a large corporate restructuring, it isn’t necessarily the final nail in the coffin yet.
The Chief Executive Officer of JCPenney, Jill Soltau, gave this statement in a press release:
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. As a result, the American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company. 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. 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,” said Soltau.
Soltau continued, “We have a newly refreshed, highly experienced team of retail executives who remain focused on rebuilding our business and restoring financial strength to JCPenney. This team has continued to innovate even during these challenging times, implementing substantial improvements to our flagship eCommerce platform to increase efficiency and ensure our loyal customers continue to have access to the products they need through elevated shopping experiences. I would also like to thank all of our outstanding associates for their continued dedication to our company and their passion for meeting and exceeding our customers’ expectations. We are continuing to serve our customers as we move through this process with a commitment to working seamlessly with our vendor partners and landlords. We look forward to emerging from both Chapter 11 and this pandemic as a stronger retailer, continuing to implement our Plan for Renewal, and building capabilities focused on satisfying customers’ wants and needs.”
JCPenney plans to reduce inventory, improve their gross margin and become more focused on profitable growth.
Many companies have filed for bankruptcy protection and used the opportunity to bounce back, but those were in normal, non-pandemic times. While this doesn’t necessarily spell total doom for the company, during these troubled times, the future of JCPenney is not solid.
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