Bankruptcy fears mount as J.C. Penney Skips Interest Payment.
J.C. Penney Co Inc said on Wednesday it will not make a $12 million interest payment on its long-term corporate bonds, a day after Reuters reported the department store operator was considering filing for bankruptcy protection.
In a regulatory filing, the company said it had a 30-day grace period to make the payment, on Senior Notes maturing in 2036, that was due on Wednesday, before it constitutes a default.
The 118-year-old company, which was already grappling with competition from online and off-price retailers, has taken a severe hit from the coronavirus crisis. It recently shut its 850 department stores, furloughed some employees and slashed spending.
JCPenney was doomed anyway but the coronavirus speeded up the effort.
More importantly, the entire super mall concept faces a day of reckoning.
Online shopping rises every year. And it takes employees to man every department no matter how few shoppers there are.
Millennials don’t shop the way their parents did and their parents don’t shop as much now as they once did.
Add it all up and this story is not so much about JCPenney but the pending retail apocalypse in general.
Mike “Mish” Shedlock
They made a good excuse and the right timing at least.
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All business are affected by the corona virus plus there is also their hit competitor the online retailing. https://enjoymexico.net/top-mexico-destinations/
JC Penny, Macy’s, Koll’s Sachs Fifth Ave, Sears and many others are on their way out. Malls could cater to Virtual offices, food courts, Bars, Gyms, medical clinics and entertainment centers offering more experiences than material things.
I thought someone stuck a fork in J C Penney a year ago…I’m surprised it took that long!
My wife should take some of the credit. She’s returned a lot of stuff to JC Penney that lots of other stores would never take back.
All those abandoned malls and stores will make swell homeless shelters. Of course, after they are no longer needed as death wards
Not ours. They tore it down. Been a pile of scattered rubble for years now. Nothing ever replaced it.
Gotta make sure the homeless stay homeless, after all……. Who the heck are hey, thinking they can have a roof over their head without paying usury to us Fed enabled and protected, worthless, parasitic leeches?
I mean, what’s next? Will they start demanding to be able to live in luxury caves, like Afghans, too? We’re trying to run a financialized dystopia here, darnit! How else do these uppity whiners think us Friends of The Fed can live in luxury without ever having done a single days worth of productive work in our whole life, if we can’t “make money of our homes” and “investments”, and “deem” and “find” that the money made by others, need to be trasferred to us?
After all, how many hedge fund billionaires are there in Afghanistan? How much did John Edwards “recover” from Afghans? See what I mean? Uppity, demanding bastards, those homeless guys……. Don’t show any respect for us privileged parasites and leeches anymore. Expecting to to be allowed to have roofs over their heads and stuff….. Trump should tweet something mean about them!
If one would be a conspiracy theorist, one might argue that this is invented to finalize the trend of putting all assets that matter in the hands of the you-know-who. I am guessing that this will follow the path of saving the rich and powerful and all the rest can do whatever they can. And a repeat ad infinitum.
Back when we believed in capitalism we would have recognized long ago that unfortunately these stores were going the way of milk delivery, the small town general store and buggy whips. But then we started playing games and suddenly cheap money allowed companies past their prime to stick around. It is painful – no one is denying that, Macy’s was one of my favorite all time stores – but either you believe in capitalism and take the pain or you don’t and you are a socialist. Start calling a spade a spade.
I still order from Macy’s online. I’m old enough that I basically grew up in a mall during my teenage years. Many friends got their first jobs there, etc. In a way, life was almost built around it. But before 1970s there were no malls either.
I grew up in a small town with a small downtown stores. All shutdown because hey couldn’t compete with WalMart. I would much prefer those stores and that life than what is left in the wake of WalMart and unfettered capitalism. But I don’t get a choice.
Mish do you own Amazon stock. Lol.
I like JC Penney.
The stores will probably get razed. 20 years from now people shopping online will realize what they see on their computer is NOT what is delivered by UPS.
Then a developer will come along and say Brick and Mortar is the way to go.
Count as a brick and mortar guy.
What will happen to the shopping malls that rent to these retailers, and the pension funds that hold the debt. Eventually, it will strike much closer to home.
They’ll be liquidated.
Or, at least they should. You never know, in a limit-case dystopian, rent seeking kleptocracy where everyone who owns, runs, controls and influences anything including government policy, is living off of crass theft rackets and crass theft rackets only.
Housing for the homeless.
“JCPenney was doomed anyway but the coronavirus speeded up the effort.”
And gave them a good excuse for some sort of government help.
You mean their creditors … same difference.
More like padding the wallets of the senior execs and BOD before bankruptcy.
Department stores and medium box retailers are being replaced with restaurants, gyms, trampoline parks, etc.
Restaurants and gyms are also f***ed. Social distancing is impossible when it comes to those types of places.
Jeff Bezos will be President in all but name soon.
Gyms and restaurants are fucked by the virus but not also by the larger trends, like JCP is.
Do restaurants, gyms and trampoline parks pay the same amount of rent as Penny’s? How much does is cost to refit a Penny’s space for these other activities? Restaurants require specialized equipment. But, none of this is really a problem. The Fed will provide all the $$ needed for landlords.
Probably. Anchor tenents pay an extraordinarily low rent. The normal model is very, very low rent for anchors, who are supposed to bring people to the mall, and very high rent to the small merchants that try to get sales from people who walk by.