None of our grandparents were born when this company was founded. It was way back on 14 April 1902 that JC Penney was founded, an American department store chain that has been famous since as far back as I can remember. However, the last decade or so has been one of the hardest in its existence so far, which only got worse with the coronavirus pandemic.
As per reports flooding in over the last couple of months, there have been numerous companies that has gone bankrupt since the pandemic broke out and JC Penney, which hasn’t turned a profit since 2011, becomes one of the largest companies to have to file for bankruptcy, now no longer able to pay back its debts for restructuring.
The iconic company filed for Chapter 11 which allows a company no long able to pay back debts for restructuring. Based in Plano, Texas, the company has around $500 million in cash and a further $900 million that it managed to receive from lenders. They issued a statement on Friday to announce the same, and this was seen coming, as the company missed a debt interest payment last month too.
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. The American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business,” said JC Penney CEO Jill Soltau in an official statement.
“Until this pandemic struck, we had made significant progress rebuilding our company… 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,” she added.
Founded by James Cash Penney, the company has survived worse problems like the great depression but sadly, they couldn’t figure a way out of this hole. Known for massive shopping malls, the decline of this company first began a decade ago with the rise of online shopping and giants in that space like Amazon, with the latter’s owner Jeff Bezos set to become the world’s first trillionaire by 2026.
However, several reports across the globe suggest that it’s not the pandemic that should be blamed as many individuals had a hand in the company’s decline, beginning with William Albert Ackman, and you can ready why we say so in this report from Forbes, which lists a few people responsible for this end of a legacy. Just to give you an idea of the company’s slide, we leave you with their share price history from the last 5 years:
