J.C. Penney Co Inc filed for bankruptcy protection on Friday, the latest among traditional brick-and-mortar retailers to crumble as prolonged store closures due to the COVID-19 pandemic deliver the final blow to troubled businesses.
The US department store chain, known for selling family apparel, cosmetics and jewelry at roughly 850 locations, said it reached an agreement with creditors for about $900 million of fresh financing to aid operations, while it navigates bankruptcy proceedings.
The company filed for Chapter 11 protection at the US Bankruptcy Court for the Southern District of Texas. Reuters earlier reported that it was nearing a bankruptcy filing and negotiating the financing.
The bankruptcy filing caps a long decline for the 118-year-old department store chain, which once operated more than 1,600 locations that became fixtures in U.S. malls. The company at one point employed nearly 200,000 people.
Even before the coronavirus outbreak, J.C. Penney was struggling with nearly $4 billion of debt and pressure from both discount retailers and e-commerce companies.
Larger retailers such as Walmart Inc and Target Corp have squeezed smaller rivals by offering bargain-price apparel, including online.
The coronavirus outbreak, which has resulted in more than 80,000 deaths in the United States, is now forcing a financial reckoning among an array of retailers that had to temporarily close their doors under states’ orders.
Earlier this month, both luxury department store chain Neiman Marcus Group and clothing retailer J. Crew Group Inc filed for bankruptcy protection after alternative attempts to rework their finances failed.
Stage Stores Inc, a US department store chain selling mid-priced apparel at hundreds of stores in mostly rural areas, said earlier this week it would liquidate unless it finds a buyer.