Economy

JC Penney makes $17 million interest payment as it explores bankruptcy

JC Penney makes $17 million interest payment as it explores bankruptcy”

In recent years, market trends have led to numerous high-profile bankruptcies in the retail business, including the likes of Toys "R" Us and Sears.

Longtime department store chain J.C. Penney filed for Chapter 11 bankruptcy Friday, the latest retailer to falter amidst the economic turmoil wrought by COVID-19. J.C. Penney, which is almost $4 billion in debt, is the fourth major USA retailer to seek Chapter 11 protection in May. In January, J.C. Penney said would close six stores by April 24 leading many to speculate if the company could see some type of recovery.

The company missed a debt interest payment in April, fueling rumors of an impending bankruptcy.

The retailer dates back to 1913, when James Penney converted a chain of 34 stores into the J.C. Penney company.

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The stock, which traded for more than $87 in 2007, now sells for just pennies per share. J.C. Penney stock (JCP), which was halted early Friday while news about its fate was pending, jumped 24% to 24 cents a share at 10:28 a.m.in NY. "While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt", Soltau said.

In February, JCPenney had about 90,000 employees and almost 850 stores in the United States, according to documents provided to the US Securities and Exchange Commission (SEC).

J.Crew and Neiman Marcus also announced bankruptcies this month. By 1928, it worked its store base up to 1,000 stores - a year before the company went public, and the Great Depression.By 1994, the retailer had $20.4 billion in retail sales, with net income nearing $1 billion.



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