J.C. Penney Co., Inc. has filed for Chapter 11 protection as it undergoes a restructuring that will include store closings and determining if a buyer can be found.
The company operates stores at Dover Mall, Christiana Mall and Prices Corner, west of Wilmington.
Store closings will be announced in the coming weeks. The filing is aimed at helping the company to close stores and gain concessions from lenders.
The filing was made near its headquarters in Plano, TX.
The company is expected to reopen its Delaware stores for full-service on June 1 in keeping with Phase 1 of Gov. John Carney’s program.
“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 Jill Soltau, CEO of JCPenney.
The company gave bonuses running in the millions of dollars to Soltau and other executives as employees remained on furlough.
In a release, Soltau claimed the company had been making progress in turning around its operations prior to the coronavirus crisis.
The company has struggled over the past couple of decades with a series of strategies that ranged from selling appliances and a store redesign that had to stop in midstream after the company ran out of money.
Soltau reported that comparable store sales improvement in six of eight merchandise divisions in the second half of 2019 over the first half of that year.
Penney, like most retailers, moved off America’s small-town main streets and into malls in recent decades.
Penney continued to face intense competition and changing consumer tastes with more affuent consumers opting for high-end retailers and lower-income consumers choosing Walmart. Archrival Kohl’s expanded by taking locations in free-standing shopping centers.
Penney’s struggles and revolving door management that included a short stint by a former executive of Wilmington credit card bank First USA (now Chase) led to many observers to predict the venerable company’s demise.
Archrival Kohl’s expanded by taking locations in free-standing shopping centers.