JCP - Will the Coronavirus Spell the End of J.C. Penney?
Is COVID-19 responsible for the current troubles at J.C. Penney (NYSE: JCP)? The short answer is no: The retailer was in trouble long before the current economic downturn.
However, the coronavirus is the final nail in the coffin that seems likely to force the retailer into bankruptcy. J.C. Penney has been plagued by heavy debt for years, which hindered its ability to allocate capital to investments and spending that could have updated a business model that hesitated for far too long before reacting to the threat of e-commerce.
The company announced on March 18 that it would be closing all of its approximately 850 stores in the wake of the coronavirus fallout, and it has extended the closures until it can reopen based on guidance from government officials. After reportedly furloughing 95,000 employees, including both hourly and corporate workers, one has to wonder whether we'll see the old-school retailer reopen at all.