IS JC Penney next? Experts question whether struggling retailer can avoid same fate as Sears with declining sales and executive vacancies pointing to ‘a broken business’ that risks the closure of 849 stores in the US
Stock prices in the company fell below $1 for the first time last month, having previously traded at $80 a piece during the recession 12 years ago
JCPenney has been described as a ‘broken business’ by experts who say a history of ill-informed strategies and a depleted boardroom are to blame
Once fierce rival Sears filed for bankruptcy last October, and JCPenney is expected to follow suit – however they could actually profit from Sears closures
The company currently has a mounting debt of $4.3 billion. $50 million is due to be paid of this year, and $2.1 billion will be coming due by 2023
They announced a 3.5% drop in holiday sales this year. If the the retail chain was to go under, 846 stores could close – affecting thousands of jobs
By LUKE KENTON
DAILYMAIL.COM
21 January 2019
JCPenney already finds itself in a precarious position in the first month of 2019: stocks are dwindling, sales are falling, and its desolate boardroom is still waiting for a number of senior vacancies to be filled.
Analysts fear the multitude of problems the department store is now facing points towards a ‘broken business’ balancing on the precipice of bankruptcy.
And just like its once fierce competitor Sears, all 846 of its stores could face closure, potentially affecting thousands of workers and risking another heavy blow to an already beaten-and-bruised retail sector.
‘Penney is a broken business,’ said Mark Cohen, director of retail studies at Columbia Business School, to the Wall Street Journal.
In its heyday, the Texas-based high-street clothing store was considered a stalwart destination for middle class families.
But with many of its locations hauled up in struggling shopping malls, the prominent rise of online retailers such as Amazon has prompted their rapid decline.
Last month, JCPenney, which hasn’t turned a profit since 2010, saw share prices drop below $1 for the first time despite competitors such as Macy’s showing an increase of fortune over the festive period.
Comparatively, during the recession in 2007 its stocks were trading for as much as $80 a piece.
A reported 3.5% drop in holiday sales led the 117-year-old company to announce more store closures in an attempt to stem the bleed as their $4.3 billion debt continues to mount.
And it’s expected to get worse, before it gets better – if at all.
‘They’re in a leaky boat that eventually will sink,’ Cohen told CNN.
‘The prognosis for the future is not happiness’.
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