J. C. Penney Company Inc., which is reorganizing in bankruptcy proceedings, announced that it is aligning its workforce with its store optimization strategy and reduced store footprint. JCPenney has identified 152 store closures following a comprehensive evaluation of store performance and strategic fit for the company and is having ongoing productive negotiations with landlords.
Penney said the announcement follows a lengthy, structured and thoughtful decision-making process. In connection with this organizational realignment, the company will reduce its workforce by approximately 1,000 corporate, field management, and international positions.
“Each of these associates has made valuable contributions to the legacy of JCPenney, and we are truly grateful for their service,” said Jill Soltau, chief executive officer of JCPenney. “These decisions are always extremely difficult, and I would like to thank these associates for their hard work and dedication. We are committed to supporting them during this period of transition.”
Ensuring A Financially Flexible Company For Long-Term Success
This organizational restructuring will create a smaller, more financially flexible company and will help ensure JCPenney emerges from both Chapter 11 and the coronavirus (COVID-19) pandemic as an even stronger retailer.
Soltau continued, “The global health and economic crisis caused by the coronavirus (COVID-19) pandemic has forced retailers to make difficult decisions. For JCPenney, that includes reducing our footprint and accelerating our store optimization strategy while we implement our Plan for Renewal. As the retail landscape continues to evolve, we will continue to make thoughtful and strategic choices to Offer Compelling Merchandise, Drive Traffic, Deliver an Engaging Experience, Fuel Growth, and Build a Results-Minded Culture to ensure that JCPenney remains at the heart of America’s communities for decades to come.”
Supporting Departing Associates
JCPenney is providing a comprehensive benefits package for its departing associates, including severance for eligible associates, healthcare coverage through COBRA for those enrolled in benefits, outplacement support, compensation for unused paid time off, and extended associate discount benefits.
Continuing Its Financial Restructuring Plan
As announced on May 15, 2020, JCPenney entered into a restructuring support agreement with lenders holding approximately 70 percent of its first-lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position. To implement the financial restructuring plan, the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Additional information regarding JCPenney’s financial restructuring is available here.
Advisers
Kirkland & Ellis LLP is serving as legal adviser, Lazard is serving as financial adviser and AlixPartners LLP is serving as restructuring adviser to the Company.
Photo courtesy J.C. Penney
