Coronavirus: JCPenney Forced to File Bankruptcy Protection | Economic news

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The financial pressure of the coronavirus pandemic forced the American department store chain JCPenney to file for bankruptcy.

Stores will be closed following Chapter 11 bankruptcy, which allows businesses to reorganize to meet their debts.

The 118-year-old company said some of its more than 800 stores will be closed in stages throughout the Chapter 11 process.



Coronavirus: America's calculation

Coronavirus: the calculus of America

It is the largest of four well-known retail companies to have filed for reorganization since the end of the pandemic in the United States.

Luxury retailer Neiman Marcus, alongside J.Crew and Stage Stores, also filed for bankruptcy during the epidemic.

“The coronavirus pandemic has created unprecedented challenges for our families, loved ones, communities and country,” said Penney’s chief executive, Jill Soltau.

“As a result, the US retail industry has experienced a profoundly different new reality,” she said.

However, market analysts are not convinced that the company will survive even if it reduces its debt burden by closing stores.

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They note that their middle-income to low-income clientele has been hit the hardest by pandemic layoffs in the United States.

“It’s a long, sad story,” said Ken Perkins, president of the research firm Retail Metrics.

“Penney offers no reason to shop there compared to its competitors, be it Macy’s, TJ Maxx or Walmart. How will they survive? ” He asked.

According to figures from the US Department of Labor, more than 36 million Americans have applied for unemployment since early March.

Unemployment in the country now stands at over 14.7% according to official figures, the worst it has been since the Great Depression of the 1930s.

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