J.C Penney to Close 3 Michigan Stores
CBS Detroit - The last couple of years hasn't been good for some retailers. J.C. Penney has had a rough time trying to tread water in what has been a stormy retail environment for some time. The company which is beloved by many for their clothing and other goods at good prices has been losing money. In the last 8 years losing $4.45 billion dollars. Then with COVID-19 closures nationwide, which closed all the malls where many J.C. Penney stores reside, was most likely the financial uppercut that did them in.
Along the way, they have tried different marketing approaches and programs to turn their ship around. Which included in 2016 a refinance of a $2.25 billion real estate term loan. Sadly though the company was forced to file for Chapter 11 bankruptcy protection on May 15th.
The only company to lead them in debt is Neiman Marcus, a luxury-goods department store chain. Then there was the surprise of Sears, America's oldest retailer founded in 1893, filed for bankruptcy protection in 2019. It had to reduce down to 425 stores which included some in Metro Detroit, which closed permanently.
Before filing for Chapter 11, J.C. Penney was trying to secure a $445 million dollar loan to keep them afloat. Which was a "debtor in possession loan", however, they were unable to strike a deal. With Chapter 11 Bankruptcy the company has been forced to close stores permanently nationwide. Initially saying it needed to close 242 stores, it has just released a list of 154 stores it will close. In the hopes, it can use Chapter 11 Bankruptcy to restructure itself financially.
In Michigan, these closings so far are only affecting northern Michigan stores at the Alpena Mall, Cadillac Shopping Center, and their Petoskey store. It's unclear if any metro Detroit stores will be affected in the future.
In an article by The Detroit Free Press, J.C. Penney CEO Jill Soltau said in a statement, "While closing stores is always an extremely difficult decision, our store optimization strategy is vital to ensuring we emerge from both Chapter 11 and the COVID-19 pandemic as a stronger retailer with greater financial flexibility to allow us to continue serving our loyal customers for decades to come,".
Michigan is one of the least impacted on the list of store closings. Ohio, Indiana, and Florida leads the list with 9 closings. Other states hit heavily are Texas, Tennessee, South Carolina, Oklahoma, New York, Kentucky, Georgia, and California with 6 or more J.C. Penney stores closing there. However, with the company saying it initially was going to close 242 stores, there could be more coming, but the company hasn't released any information about that as of now.
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