JCPenney is reportedly considering filing for bankruptcy and closing hundreds of stores
JCPenney is preparing to file for bankruptcy as early as next week, though no final decision has been made, Reuters reported Friday, citing people familiar with the matter.
According to Reuters, about a quarter of the chain's roughly 850 stores could permanently close.
A representative for JCPenney declined to comment to Business Insider.
The department store has nearly $4 billion in debt. It missed a debt payment on April 15 but has a 30-day grace period that ends next Friday.
After closing all of its stores in response to the coronavirus pandemic in March, JCPenney began to reopen stores in certain states at the beginning of May, implementing safety measures like plexiglass at registers and contactless curbside pickup.
But JCPenney has faced struggles for several years. Like many other department stores, it's faced slumping sales as shoppers increasingly turn to online options and mall foot traffic declines. It has also faced stiff competition in off-price retailers like TJ Maxx and Ross Stores. Frequent changes to the executive team and shifting strategies have exacerbated issues.
JCPenney has closed dozens of stores in recent years, including six stores and a Kansas customer service center that permanently shuttered at the beginning of 2020. It reported that comparable sales decreased by 7.7% for the fiscal year ending February 1.
JCPenney is in the midst of a turnaround plan, spearheaded by CEO Jill Soltau, that involves reducing inventory and sharpening its focus on its core audience of middle-class families.