PLANO, TX — (05-15-20) — J.C. Penney announced Friday it has filed for bankruptcy, marking the largest retail industry casualty so far during the coronavirus pandemic. The stock price for J.C. Penney plummeted last month to a penny stock, closing on Friday at $0.24 [NYSE:JCP] Per share.
The 118-year-old department store chain had already racked up a substantial amount of debt in recent years, but managed to pay its $17 million interest payment that was due more than a week ago on its senior secured term loan credit facility.
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” said CEO Jill Soltau. “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,” said Soltau.
The company maintained it is still continuing to reopen stores and offer “Contact-free curbside pickup service” at all of its brick and mortar locations.
“Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that JCPenney will build on its over 100-year history to serve our customers for decades to com,” added Soltau. “We have a newly refreshed, highly experienced team of retail executives who remain focused on rebuilding our business and restoring financial strength to JCPenney.” said Soltau.
One of the nation’s largest retail chains, J.C. Penney’s has been suffering from declining sales for years and has built up over $4 billion in debt. And with the coronavirus pandemic shutting down its retail store locations for over 8 weeks, its understandable why they filed for bankruptcy.
In a press release issued by J.C. Penney’s public relations division, it says…“While the challenging market conditions have impacted the Company’s ability to meet its current operational and financial objectives, the Company remains focused on returning JCPenney to sustainable, profitable growth by reestablishing the fundamentals of retail, re-envisioning its merchandise offerings, and rolling out new innovations,” .
The publicly traded company said it had approximately $500 million in cash on hand as of the Chapter 11 filing date, and has received commitments for $900 million in debtor-in-possession financing from its existing first lien lenders.
The bankruptcy comes after the company announced in a regulatory filing that it paid huge bonuses to multiple executive officers after it announced it furloughed the majority of its hourly store associates.
As part of the deal, Soltau received $4.5 million, and separate $1 million were also awarded to Bill Wafford, executive vice president and chief financial officer, Michelle Wlazlo, executive vice president and chief merchant, and Brynn L. Evanson, who is also an executive vice president and the chief human resources officer.
Article by: Paul Goldberg, Staff Writer
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