J.C. Penney is exploring filing for chapter protection after the coronavirus pandemic compelled the U.S. retailer to temporarily shut its 850 malls, upending its turnaround plans, based on individuals aware of the matter.
The Plano, Texas-based firm has entry to sufficient money to survive within the months ahead, at the same time as income dries up because of the shop closures, the sources mentioned. Nonetheless, the corporate is considering a chapter filing as one way to rework its unsustainable funds and save money on looming debt funds, which include vital annual interest expenses, the sources added.
Concerns about extended store closures and customers remaining sparse even when outlets eventually reopen have also factored into J.C. Penney’s deliberations, some of the sources stated.
J.C. Penney has not made any last decisions on how to address its strained funds, the sources stated. The retailer is also contemplating asking creditors for breathing room via transactions that may rework debt outside of chapter court proceedings, the sources added. There’s also a risk that J.C. Penney will be able to secure rescue financing, one of the sources stated.