US department store chain JC Penney will likely file for bankruptcy protection as soon as next week, people familiar with the matter say.
US department store chain JC Penney will likely file for bankruptcy protection as soon as next week, people familiar with the matter say. Pexels

Shopping giant to file for bankruptcy, sources say

JC Penney Co Inc is preparing to file for bankruptcy protection as soon as next week with plans to permanently close about a quarter of its roughly 850 stores, becoming the latest major US retailer to succumb to fallout from the coronavirus outbreak, according to people familiar with the matter.

A bankruptcy filing would cap a long decline for the iconic 118-year-old department store chain, which struggled with a nearly $US4-billion ($A6.1 billion) debt load and competition from e-commerce firms and discount brick-and-mortar retailers even before the pandemic's onset.

The Plano, Texas-based company, which employs nearly 85,000 people, is in discussions with creditors for a so-called debtor-in-possession loan to bolster its finances while it navigates bankruptcy proceedings, the sources said. The loan could total between $US400 million and $US500 million, some of the sources said.

The timing of a bankruptcy filing could slip depending on how much time it gets from creditors, the sources said. JC Penney skipped a $US17 million debt payment on Thursday and only has five days to make good on it before defaulting.

Luxury department store chain Neiman Marcus Group and clothing retailer J Crew Group Inc filed for bankruptcy protection this week.

Originally published as JC Penney to file for bankruptcy: sources



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