Responding to losses attributed to the COVID-19 outbreak, the department store company J.C. Penney has announce that it is going to shed just over 240 of its existing 846 stores.
The Plano, Texas-based company has entered into Chapter 11 bankruptcy proceedings expected to see a 35 percent slice of its property put into a real estate investment trust.
In a statement, Jill Solteau, Penney’s chief executive officer, said the COVID pandemic has “created unprecedented challenges for our families, our loved ones, our communities, and our country.”
Solteau continued that, in response to the virus outbreak and a precipitous decline in store sales, the company has been forced to make “difficult decisions in running our business to protect the safety of our associates and customers and the future of our company.”
Exactly what stores will be closed and where has not been officially announced, but analysts are saying that those properties, which on average measure around 110,000 square feet, could prove alluring to other companies who may want to repurpose them for a new use.
The publication National Real Estate Investor speculates that online commerce giant Amazon may be interested in purchasing many of stores, noting: “It would gain a bricks-and-mortar footprint that could propel its burgeoning apparel business through the creation of a network of satellite distribution centers.”
Although J.C. Penney has always had a large presence in urban and suburban America, many of its stores, offering work clothes and hardware, were located in rural areas. “Of the roughly seventeen hundred stores in the J.C Penney chain,” notes author David Delbert Kruger in his 2017 biography of store founder James Cash Penney, more than half were located in “towns of fewer than fifteen thousand residents.”
Although most of the chain’s locations are clustered on the East coast and Midwest, there are currently 21 Penney’s stores in Arizona, 16 in Colorado, and 10 in New Mexico.
Launched in 1902 in Kemmerer, Wyoming, J.C. Penney’s saw initial success as the prototype of the modern department store, selling everything from household appliances to garden merchandise, auto parts, and sporting goods.
Hearings in the company’s bankruptcy proceedings are scheduled to be held early next month in the U.S. Bankruptcy Court for the Southern district of Houston.
By Garry Boulard
