Distressed retail. The list of troubled US chains is getting longer. Now JC Penney too is filing for Chapter 11. The company filed for credit protection with the Federal Bankruptcy Court in the southern district of Texas. It is the third large sign, shortly after Neiman Marcus and J. Crew.
JC Penney asks for Chapter 11
JC Penney hasn’t been profitable since 2010, reports CNN. The US retailer, founded 118 years ago, operates around 850 stores across the States. The restructuring plan provides for the closure of an unspecified number of stores. According to Footwear News, the plan aims to divide the business into two public companies, with the separation of the retail business from that of a real estate investment fund in order to increase liquidity.
The list of creditors includes Nike, with a balance due of over 32 million dollars, Adidas (over 7 million dollars), Van Heusen Sportswear (about 5.7 million dollars), Footwear Unlimited, which controls Baretraps and Andrew Geller (almost 4 million dollars), and New Balance (approximately 3.2 million dollars).
Amazon, meanwhile, may have sniffed the deal and, in case the Jc Penney plan failed, it would be ready to swoop like a hawk to take over the chain at a low price. WWD, citing an anonymous source, wrote that Amazon has already activated a “team in Plano (Texas) where JC Penney is located”. Why would Amazon want JC Penney? For several reasons. First: to increase clothing sales e accessories. Second: to transform some of the properties of the department store into distribution facilities. Third: to create “a new technology-driven shop model” that uses its Just Walk Out cashless system. Others interested in detecting JC Penney, according to WWD, could be Simon Property Group and Brookfield.
The lockdown puts retail in trouble everywhere. Oxygen no longer arrives, and the signs risks suffocating. In Germany, Galeria Karstadt Kaufhof plans to close 80 of its more than 170 stores, putting thousands of jobs at risk. The news, reported by several German media, transpires from the restructuring plan in progress after the request for creditors protection in early April. In France, Naf Naf (243 stores) entered administration controlled by the commercial court of Bobigny in order to facilitate the transfer of ownership. The offers are already on the court table.
In the UK, Johnsons Shoe Company has entered controlled administration. Founded in 1952, it manages Johnsons Shoes and Bowley’s Fine Shoes and has 12 stores. In Switzerland, Pasito-Fricker shoe store chain is bankrupt. The company controls 23 stores with 69 employees. In Japan, apparel manufacturer Renown Inc. has filed for bankruptcy protection. Founded in 1902, the brand is controlled by the Shandong Ruyi group, the same one that owns SMCP and has not yet finalised the purchase of Bally.