Bankrupt J. C. Penney Company Inc. is trimming its fleet.
In a filing with the Securities and Exchange Commission on Monday, the retailer stated that it plans to close 242 doors, or about 29% of its 846-store fleet.
The company expects to close 192 units by February 2021 (the end of the current fiscal year). An additional 50 locations will close in the following fiscal year. At that point, JCPenney plans to have a fleet of about 604 units. Those remaining outposts made up 82% of sales for the 2019 fiscal year, the retailer stated. JCPenney has not yet revealed which outposts will be permanently shuttered.
“The approximately 604 future fleet represent the highest sales-generating, most profitable and most productive stores in the network,” the company wrote in the SEC filing. “The go-forward network will enable better allocation of centralized resources and capital expenditure while maximizing cash generation.”
In its Chapter 11 filing, JCPenney listed its assets in the range of $1 billion to $10 billion — the same as its estimated liabilities. As it restructures through the Chapter 11 process, the corporation has secured debtor-in-possession commitments of $900 million, including $450 million in new funds. However, not all of that money is immediately available to the struggling retailer: According to the filing, which was made Friday evening in Texas bankruptcy court, the first half of that financing will be released to the company following a court hearing in June. The remainder is contingent upon JCPenney’s ability to meet certain business targets as required by its lenders.
The coronavirus crisis had forced JCPenney to temporarily shutter all 846 units. As of Friday’s filing, the vast majority of its stores remained shut — with just 41 outposts reopened and an additional seven offering curbside pickup only. The company is planning to announce the reopening of about 115 outposts on Wednesday.