Days after it filed for bankruptcy, US shopping mall giant JC Penney disclosed it is now looking at shutting down more than a fourth of its shops.
In a document filed with the Securities and Exchanges Commission on Monday, almost 30 percent of the company's 846 stores will cease operations between the current fiscal 2020 and next fiscal year.
For the current year, which ends Feb. 2021, 192 branches are estimated to shut down and then 50 in the next fiscal year, the document showed. After the closures, JC Penney will have 604 remaining stores.
In March, JC Penney closed down all of its shops as a result of the coronavirus crisis, but has since slowly started to reopen for business on a very limited capacity. A spokesperson disclosed to USA Today that 115 branches will open again on Wednesday.
The 118-year-old Texas-based retail giant filed for bankruptcy restructuring early Friday, making it the largest retail firm to do so since the pandemic ravaged businesses across the United States and forced them to temporarily halt operations.
After making public its bankruptcy filing, JC Penney stated its physical locations and online sales business will continue to operate during the restructuring process.
The Covid-19 misery has started to cripple some of the weakest business entities as retail sales collapsed. Neiman Marcus and J.Crew sought bankruptcy coverage days prior to JC Penney's bankruptcy announcement. All three were already stricken with mounting debt and experiencing difficulty making profits and connecting with buyers.
JC Penney said online that it has recently restarted more than 50 of its shops across the US, including two in Georgia, at the South Point Shopping Center in McDonough and Augusta department store, after it shut down locations in March due to the crisis. All other Georgia branches, including the Kennesaw location, remain closed, the company's website disclosed.
Around 112 JC Penney stores will reopen for business Wednesday, communications manager Kristen Bennett told the MDJ Monday, adding that she did not have any update with regards the Kennesaw branch.
According to chief financial officer Bill Wafford, as a result of the pandemic, JC Penney's year-on-year net profits plunged by about 88 percent, and tradition bricks and mortar revenues fell to nearly zero.
The bankruptcy situation sets the stage for the process of permanent store shutdowns as JC Penney works to resuscitate its financial health and steer itself away from outright liquidation - a dilemma that companies like Payless ShoeSource, Toys R Us, and others have not been able to evade.
