J. C. Penney Company Inc. is set to begin liquidation sales at certain closing outposts within the coming weeks, an attorney for the retailer said on Thursday in a virtual court status update.
After filing for Chapter 11 bankruptcy protection earlier this month, the Plano, Texas-based company plans to shutter 242 stores permanently through its restructuring plan. A hearing about the proposed closures is scheduled for June 11. Assuming it receives court approval, JCPenney expects to commence going-out-of-business sales at some locations that day, with another, smaller batch of store closings sales to begin July 1.
The company has not yet announced which stores will be closed but plans to disclose the proposed closures in a June 4 court filing. The 242 stores slated for shuttering represent about 29% of JCPenney’s brick-and-mortar fleet. The department store chain anticipates shutting down 192 units by February 2021, or the end of the current fiscal year. An additional 50 locations are expected to closue the following fiscal year. At that point, JCPenney plans to have about 604 stores total.
Amid the coronavirus pandemic, JCPenney shuttered all of its nearly 800 units in mid-March. As of today, the company has reopened 304 stores across the country. Another five outposts are currently offering only contactless curbside pickup services. By next week, the retailer plans to have reopened around 200 more doors.
JCPenney, which was founded 118 years ago, filed for Chapter 11 protection on May 15. According to court documents, the retailer had $500 million in cash at hand and received debtor-in-possession financing commitments of $900 million. The company listed assets in the range of $1 billion to $10 billion — the same as its estimated liabilities.
For several years, JCPenney struggled with declining sales, numerous leadership changes and increased digital competition. Since taking the helm in October 2018, CEO Jill Soltau has shut down underperforming stores and brought on new talent to revive the business. The company also hired debt restructuring advisers in July 2019 as part of its turnaround plan, as well as experimented with new strategies including tapping into the outdoor and consignment markets and launching a curbside pickup program. However, investors had largely lost faith in the retailer, pushing its stock below $1 and putting it at risk of being delisted from the New York Stock Exchange. And then came the coronavirus pandemic, which caused the chain to furlough workers and take additional actions to maintain its financial flexibility.