Though it made an interest payment that saw it live for another day, J.C. Penney—the iconic discount retailer—remains on the verge of filing bankruptcy protection. How did the Plano, Texas-based retailer fall from grace and meet this fate?
J.C. Penney (JCP) dates back to 1902, when James Penney started a dry goods store called ‘Golden Rule.' That business grew, and in 1913 Penney converted 34 stores into the J.C. Penney company.
The retailer was revolutionary for its time, helping to transform retail by banning price haggling—a common practice—from its stores. This way, every customer would purchase the same item at the same price.
J.C. Penney went public in 1929, one week before the market crash and the beginning of the Great Depression. Nevertheless, it thrived in the decades following, as customers sought out low prices and steep discounts on goods.
J.C. Penney was quick to embrace e-commerce, establishing its website in 1994, and continuing to experience growth and success
But the retailer would soon hit a roadblock.
Sales flagged during the recession, and the company hasn’t been profitable since 2010. A series of CEOs have attempted to turn the company around, but to no avail. Today, the retailer's 846 stores are less than a quarter of the 3,000+ stores it had in 2001. The former retail giant has nearly $4 billion in debt.
J.C. Penney isn’t the only retailer to fall victim to the pandemic. The already-struggling department stores Neiman Marcus and Stage Stores filed for bankruptcy in May, crumbling under pressure from the coronavirus and plunging retail sales as COVID-19 annihilates consumer spending.
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