Iconic 118-year-old chain JC Penney files for bankruptcy, as retail sales plunge further than predicted

US consumer spending plummeted a record 16.4 per cent in April

Oliver O'Connell
New York
Sunday 17 May 2020 02:05
Comments
A parking lot at a JC Penney store is empty in Roseville, Michigan on Friday, 8 May, 2020. The company filed for bankruptcy a week later.
A parking lot at a JC Penney store is empty in Roseville, Michigan on Friday, 8 May, 2020. The company filed for bankruptcy a week later.

JC Penney, once an anchor tenant of malls across America, has filed for bankruptcy protection, the latest retailer to do so in the devastating economic wake of the coronavirus pandemic.

News of the bankruptcy comes as data released on Friday showed US consumer spending plummet a record 16.4 per cent in April — more than had been expected.

With more than 800 stores and 85,000 employees, the chain had been on the decline for more than a decade — a victim of online shopping, shifting consumer tastes, and with malls increasingly falling out of fashion.

The company, founded in 1902 in Kemmerer, Wyoming, joins other high profile retail bankruptcies announced this month, including Neiman Marcus, J Crew and John Varvatos.

The company has agreed lenders to reduce its billions of dollars of debt and explore sale options. Store closures are on the cards, but specifics are yet to be decided.

As some states emerge from lockdown, some JC Penney locations will be reopening, and others will allow curbside pickup. This will continue through the period of restructuring.

Jill Soltau, chief executive officer of JCPenney, said in a statement: “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.”

She added: “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.”

April’s retail figures were expected to drop approximately 12 per cent, after March’s record 8.3 per cent fall — so the drop of almost 17 per cent was particularly shocking.

Clothing stores saw a massive 78.8 per cent fall in sales in April. Electronics and appliances and home furnishings all fell by approximately 60 per cent.

Retailers are struggling not just with lockdown measures shuttering physical stores, but also a collapse in consumer confidence as job losses reach levels not seen since the Great Depression.

In just two months, 36.5 million Americans have filed unemployment claims.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in