J.C. Penney announced on Friday that it filed for Chapter 11 bankruptcy protection. The retail chain was already struggling to stay afloat in the midst of the retail apocalypse, and the COVID-19 pandemic only made matters worse.
In a statement, CEO Jill Soltau said the coronavirus outbreak was what ultimately led to the need to file for bankruptcy.
"Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy -- and our efforts had already begun to pay off," said Soltau. "Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that JCPenney will build on its over 100-year history to serve our customers for decades to come."
J.C. Penney announced in March that it would be closing stores and furloughing employees during the health crisis. The retailer has only been able to reopen 41 of its 846 stores to consumers.
As part of an agreement with its lenders, J.C. Penney will close more of its stores while it attempts to revive its business. J.C. Penney promised to provide more specific information, such as locations affected, in the coming weeks.
The retailer currently has around $500 million in cash and has received commitments for roughly $900 million in financing to help it get out of bankruptcy. The company will borrow an additional $450 million from its lenders to pay for operations during the reorganization effort.
The coronavirus pandemic has led to a number of bankruptcy filings. J.Crew, Neiman Marcus, and Stage Stores (SSI) all filed for bankruptcy during the month of May amid a significant decline in sales.
Sales at department stores fell 47 percent in April, and clothing store sales fell 89 percent, according to government figures reported on Friday.