US department store JCPenney, which has not turned a profit since 2011, on Friday became the latest American retailer to be pushed into bankruptcy by the coronavirus pandemic.
The iconic business said it was filing for Chapter 11, a mechanism which allows a company that can no longer pay its debts to restructure.
The group, based in Plano, Texas, will close some stores across the US as a result, it said in a statement.
It has $500 million in cash and has received financing commitments of $900 million from lenders, it added.
The company missed a debt interest payment in April, fueling rumors of an impending bankruptcy.
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” chief executive officer Jill Soltau in a statement.
“The American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business,” she continued.
“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,” Soltau said.
Founded in 1902 in Wyoming by James Cash Penney, the chain survived the Great Depression and established itself in the second half of the 20th century as an anchor of giant suburban shopping malls, then symbols of American consumerism.
But -- like clothing company J.Crew and department store Nieman Marcus, which have also filed for bankruptcy since the pandemic began -- it has struggled for years.
Its decline began a decade ago with the advent of online shopping and the rise of Amazon as well as trendy, cheap chains like H&M and Zara.
In February, JCPenney had about 90,000 employees and nearly 850 stores in the United States, according to documents provided to the US Securities and Exchange Commission (SEC).
The company plans to reduce its number of stores in stages as part of its comprehensive restructuring plan.
It reported sales of $10.7 billion in 2019, a decrease of more than $7 billion in 10 years.SHOW MORE