In the months leading up to its bankruptcy, J. C. Penney Company Inc.’s balance sheet recorded massive losses.
The beleaguered department store announced in a filing with the Securities and Exchange Commission that it had suffered a $546 million loss in the first quarter, compared with the prior year period’s $154 million loss. Its revenues also plunged from $2.56 billion a year ago to $1.2 billion in the three months ended May 2.
What’s more, JCPenney’s operating loss ballooned to $477 million, versus last year’s loss of $93 million. That figure was 40% more than it predicted it would lose when it released preliminary financial results three weeks ago.
FN has reached out to JCPenney for comment.
The Plano, Texas-based chain is currently in the process of liquidating locations as part of its store optimization strategy. (It operates 846 units across the country and employs more than 90,000 workers.) Two weeks ago, the company confirmed an initial phase of 136 permanent closures, followed by last week’s announcement of another round of 13 outposts set to shut down in the coming months. It anticipates a third wave of closures but has yet to provide a date for such sales.
In total, JCPenney expects to close 242 doors, or about 29% of its fleet, by February. As part of its plan to restructure, the retailer intends to reduce its brick-and-mortar footprint, while focusing its resources on top-performing locations and its e-commerce business.
JCPenney, which was founded 118 years ago, filed for Chapter 11 protection in mid-May. According to the filing, it had $500 million in cash at hand and received debtor-in-possession financing commitments of $900 million. It also recently received court approval to access $450 million of new money from its first-lien lenders, $225 million of which will be drawn immediately.
The retailer’s longtime struggles were compounded amid the COVID-19 pandemic, which forced it to shutter scores of outposts across the country and furlough most of its retail associates. Today, nearly all of its outposts have reopened with safety precautions in place following coronavirus-related closures.