The American chain of J.C. Penney department stores specializing in selling clothes and accessories began bankruptcy proceedings.
A notice to that effect has been filed with the Bankruptcy Court for the Southern District of Texas. It was stated that an agreement had been reached with most creditors regarding the restructuring, but the company had to close most stores and fire many employees. The company also managed to raise new funds in the amount of $450 million, which will be used for restructuring.
J.C. Penney is one of the oldest U.S. trading companies, founded back in 1902. Its best years were in the first half of the 20th century, but then, when shopping centers began to close across the country, consumer interest in classic department stores began to decline. As a result, by the end of the 20th century, a chain of almost 850 retail outlets had its first financial difficulties. We can say that the road to bankruptcy for J.C. Penney began a few decades ago.
The real problems for the company began when it was run by former CEO Ron Johnson, who took office in 2011. Johnson's previous management of the Apple store chain didn't help much. He complicated an already difficult task of managing a chain of stores by deciding to completely rethink that approach. Revised pricing schemes and an attempt to change the image of the stores eventually resulted in a sharp drop in sales and a huge loss of revenue. From these "improvements," the company has not recovered anymore, and in all subsequent years, it has only constantly accumulated new problems and debts.
The coronavirus pandemic only accelerated the inevitable. At a time when even healthy and powerful companies are experiencing significant problems, J.C. Penney had no chance of surviving.
And while J.C. Penney CEO Jill Soltau claims that the new strategy has led to significant results in the company's recovery, experts are skeptical. Allegations were made that the network's bankruptcy was expected, and all efforts to restore it simply delayed the inevitable but did not bring worthwhile results. However, some analysts doubt the future of the company, despite all the plans and funds received for the restructuring.