Several national retailers have had to file bankruptcy and close most of their stores to survive this pandemic. The economy has been hit hard, and this pandemic has taken more then lives, our way of normalcy.
JCPenny is one of those stores. They will be closing about 200 stores followed by 50 stores next year. They are filing bankruptcy to save the business from completely falling off the map.
According to CNN:
JCPenney (JCP) is the fourth national retailer to file for bankruptcy just this month. On May 4, clothing retailer J.Crew filed for bankruptcy, followed by a filing from Neiman Marcus on May 7. On May 10, Stage Stores (SSI) filed for bankruptcy.
A bankruptcy filing does not necessarily mean a company will go out of business. Many have used bankruptcy to shed debt and close unprofitable operations which eventually led them to financial success. But not every company that enters bankruptcy intending to stay in business survives the process.
JCPenney blamed the Covid-19 pandemic for its need to file bankruptcy.
"Until this pandemic struck, we had made significant progress rebuilding our company," CEO Jill Soltau in a statement Friday night announcing the bankruptcy, adding that the company's efforts "had already begun to pay off."
"Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that JCPenney will build on its over 100-year history to serve our customers for decades to come," Soltau said.
But JCPenney's problems go back far before the Covid-19 pandemic. It has been struggling with the decline in the entire department store sector. More consumers are shopping online instead of in person. The sector was also battered by the growth of big box discounters such as Walmart (WMT), Target (TGT) and Costco (COST), which provide shoppers with lower prices and a selection of items not found in department stores, such as groceries.
The company hopes that this will help them stay on the map as a majority of people use online retailers now to shop even prior to the pandemic.
It is going to be difficult as we do not know what the future brings for us. Our life as we knew it is in the past.
Also, make sure if you are going to spend your stimulus check on things other then bills to support American businesses. They need all the help, oh, and avoid Walmart!