The department store chain, which filed for bankruptcy last month, is slowly moving toward its goal of closing 250 stores, about 30% of its network of 846 locations.
The company previously said it expects 200 of those closings to occur later this summer, and the remaining 50 to close by next summer. Most of the 13 stores in the last round will begin clearance sales around July 3. Seven of the stores in this round are in Michigan: Greenville, Owosso, Big Rapids, Alma, Bay City, Mt. Pleasant and Okemos.
The remaining stores are in Bay Shore and Poughkeepsie, New York; Omak and Sunnyside, Washington; Hyattsville, Maryland; and Concord, California.
Before Tuesday’s announcement, 136 stores had already started clearance sales.
Store closing sales are vital for bankrupt retailers to raise cash during a court-supervised reorganization. With the pandemic that kept many stores closed in late March and throughout April, some bankruptcy applications were delayed due to the inability to maintain these sales.
But it is unclear how successful sales will be, as many shoppers are still reluctant to venture into stores and others are cutting back on purchases as job losses have hit a record high in recent months.
JCPenney (JCP)It is the largest national retailer to file for bankruptcy following the pandemic, along with J. Crew and Neiman Marcus.
However, all three companies said they intend to stay in business. The bankruptcy process allows companies to get rid of debts and other liabilities that they can no longer pay.
The process can give a company a second chance at life. Some companies that have filed for bankruptcy in recent decades, including General Engines (GM) And many of the nation’s airlines actually posted record profits after emerging from bankruptcy.
But not all companies filing for Chapter 11 that plan to stay in business can ultimately do so. Pier 1, which filed for bankruptcy on February 17, before stay-at-home orders that closed many stores across the country, has since said it will permanently close all of its stores and close its businesses.
JCPenney may have been forced into bankruptcy by the Covid-19 crisis, but has been ill for a time. Many shoppers have drifted away from traditional department stores and malls, rather than buying more products from online retailers like Amazon (AMZN) or big box chains like Walmart (WMT), Costco (COST) and objective (TGT). These companies offer lower prices and a wider range of products, including groceries.
This news is not only bad for JCPenney. Now Macy’s (METER), Sears and Kohl’s (KSS) Must compete with rock bottom prices at many JCPenney stores. And the closings are a negative sign for shopping malls struggling to attract shoppers once again, as JCPenney is often the anchor of a shopping mall.