J.C. Penney piles sale upon sale trying to dig out of ‘abyss’

A J.C. Penney store in Culver City, Calif. Bloomberg photo

DALLAS — Department store chain J.C. Penney filed for bankruptcy protection on Friday and said it would permanently close some of its 850 locations, making it the latest major retailer felled by the coronavirus pandemic.

The filing came the same day Commerce Department data showed the industry’s devastating decline. Retail sales fell 16.4 percent in April, by far the steepest drop on record, with sales at clothing stores — down 89 percent from a year ago — taking the biggest hit.

The retailer has mall stores in Watertown and Massena.

The 118-year-old retailer was struggling long before the public health crisis forced it to temporarily shutter all of its stores and furlough the majority of its 90,000 employees. It has nearly $4 billion in debt and hasn’t turned a profit since 2010. Sales have fallen for four straight years as it struggled to win back the longtime loyalists who have gravitated to big boxes like Target and Costco to outfit their families.

It had recently missed two debt payments, on April 15 and May 7, for about $30 million.

Heading into the pandemic, Penney had $1.8 billion in liquidity. As of Feb. 2, that included $386 million in cash and $1.4 billion available on its revolver which it withdrew $1.25 billion of it in March when it closed stores and furloughed employees.

Last week, Penney averted a breakup with Sephora, which operates shops inside more than 650 Penney stores. The two exchanged court filings and settled their dispute saying they had agreed to mutually beneficial revisions to their joint operating agreement.

Tribune Wire

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