J. C. Penney Company Inc. announced today its plans to cut about 1,000 jobs as it shutters 152 stores.
The layoffs will span across corporate, field management and international positions. JCPenney had previously disclosed plans to close over 150 doors this summer; liquidation sales are now underway and expected to run through September. It expects to close 242 doors, or about 29% of its fleet, by February.
“The global health and economic crisis caused by the coronavirus pandemic has forced retailers to make difficult decisions. For JCPenney, that includes reducing our footprint and accelerating our store optimization strategy while we implement our plan for renewal,” said CEO Jill Soltau in a release. “As the retail landscape continues to evolve, we will continue to make thoughtful and strategic choices… to ensure that JCPenney remains at the heart of America’s communities for decades to come.”
Following weeks of speculation, JCPenney filed for Chapter 11 protection on May 15. The department store chain had for several years been challenged by declining sales, numerous leadership changes and increased digital competition. As part of its turnaround plan, the company had hired restructuring advisers in July 2019, in addition to experimenting with new strategies, including tapping into the outdoor and consignment markets and launching a curbside pickup program.
Nevertheless, 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. Challenges mounted further due to the pandemic, which forced JCPenney to temporarily shutter its entire fleet of approximately 850 units.
With doors shut, JCPenney furloughed scores of workers and took other actions in hopes of maintaining its financial flexibility, including tapping roughly $1.25 billion from its $2.35 billion revolving credit line. At the end of June, the retailer had about $980 million in cash on hand, besting its projected budget by around $100 million.
Last week, JCPenney submitted its business plan to lenders. The company was initially required to get approval for the plan — which isn’t public but has been shared with creditors, lenders and prospective investors — by July 15. However, a judge for Texas bankruptcy court has granted the retailer an extension to July 31 as it continues to negotiate.