JC Penney Co Inc is preparing to file for bankruptcy protection as soon as next week with plans to permanently close about a quarter of its roughly 850 stores, becoming the latest major US retailer to succumb to fallout from the coronavirus outbreak, according to people familiar with the matter.
A bankruptcy filing would cap a long decline for the iconic 118-year-old department store chain, which struggled with a nearly $US4-billion ($A6.1 billion) debt load and competition from e-commerce firms and discount brick-and-mortar retailers even before the pandemic’s onset.
The Plano, Texas-based company, which employs nearly 85,000 people, is in discussions with creditors for a so-called debtor-in-possession loan to bolster its finances while it navigates bankruptcy proceedings, the sources said. The loan could total between $US400 million and $US500 million, some of the sources said.
The timing of a bankruptcy filing could slip depending on how much time it gets from creditors, the sources said. JC Penney skipped a $US17 million debt payment on Thursday and only has five days to make good on it before defaulting.
Luxury department store chain Neiman Marcus Group and clothing retailer J Crew Group Inc filed for bankruptcy protection this week.